Oxygen shortage amid Covid-19 second wave has affected industrial production

Covid-19 has had a significant negative impact on businesses across all sectors and taken a toll on healthcare systems and facilities in South Africa. In recent weeks, there have been news reports of a high demand of medical oxygen, putting immense pressure on oxygen suppliers and affecting industrial supply.

In an attempt to assess the scale of the oxygen shortage, the Steel and Engineering Federation of South Africa (SEIFSA) surveyed its member companies to establish their experiences around oxygen shortage within the metals and engineering (M&E) sector and to understand the impact of the shortage on their production levels and whether alternative measures were being sought regarding input supply chains.

According to the survey results, which was sent to all 1 600 companies that are members of SEIFSA through its affiliated Associations, 76.92% of the respondents said they had experienced oxygen shortages and had considered alternative supplies in the process. Several companies whose analytical instruments use oxygen had to alter their inspection regularly to reduce consumption and find alternative supply, in one case at a cost of R4 000 per bottle versus the standard cost of R140 per bottle.

Some of the respondents mentioned that they were at risk of running out of oxygen within 14 days. Others said the impact had been so severe that they had to apply for extensions on their projects or stop production altogether.

“Based on the views of the respondents, SEIFSA is of the view that the oxygen shortage has, indeed, disrupted industrial production. However, we concur with our respondents who believe that lives need to be saved, hence the supply of medical oxygen should be prioritised,” said SEIFSA Chief Economist Chifipa Mhango.

He said, however, the SEIFSA survey indicated that the issue of oxygen supply is a concern as the Covid-19 pandemic persists. He said it is clear that the second wave had placed a strain on sectors heavily reliant on oxygen as a result of the high rate of daily hospital admissions. He said that going forward, strategic interventions and engagements will be required with oxygen suppliers to salvage the crisis.

“However, with the Covid-19 vaccine rollout soon to be implemented in the country and a managed approach by Government to reduce Covid-19 infections, we expect a return to normality in oxygen supplies in the coming weeks and months as hospitalisation rates decline,” Mhango concluded.