FUEL supplies in Gauteng continued to dwindle yesterday as the strike in the chemical and petroleum sector ended its first week.

Tens of thousands of workers in the fuel sector began walking off the job on Monday, delaying deliveries and sparking panic buying at service stations in Gauteng, the economic hub of the country. The panic buying created an even greater problem, with people putting stations under abnormal demand, especially those in the province's business districts.

Refineries were still operating and petrol was being delivered to most petrol stations, but a prolonged and even widening strike could hurt the transport sector and prospects for growth in SA.

"If they keep on striking next week, the impact on the economy can potentially run into the billions of rand," Dawie Roodt, chief economist with the Efficient Group, said.

Automobile Association spokes- man Gary Ronald said motorists, anticipating shortages, had rushed to fill their cars. "If a lot of people did that, the demand for fuel would have increased and supply decreased, and now there is not enough supply available for everybody. This accelerated the shortages," he said.

But he admitted the fuel shortages were more widespread than had been expected. "It has spread faster than in previous years. I think what has happened now is that the contingency plans by the refineries have not worked as well as they thought they would," he said.

The Fuel Retailers Association said yesterday that 200 to 250 petrol stations were out of petrol. Petroleum group Shell said at least 50 of its 230 retail sites in Gauteng had run out of stock of one or more grades of fuel.

"We have not been able to fully recover from a delivery backlog in Gauteng since many retail sites are experiencing considerably higher sales," the company's spokesman, Elton Fortuin, said.

The Chemical, Energy, Paper, Printing, Wood and Allied Workers Union has been on strike since Monday, demanding a 13% pay hike for workers; employers have been offering 4% to 7%.

The union and employers were expected to meet today and at the weekend in a bid to end the strike.

While fuel supplies have continued to fall in Gauteng, the effect on logistics and commercial fleets has until now been limited.

Retailer Pick n Pay's operations director, Neal Quirk, said there were no disruptions to their deliveries. "We have been in touch with our service providers, who have assured us that they have the appropriate contingency measures in place.

"We do expect to be largely unaffected in our ability to serve our customers. There has been no interruption in our deliveries to stores to date," Mr Quirk said.

Trevor Phillip, executive director of the National Association of Pharmaceutical Wholesalers, said that medicine supplies were not affected for now as most wholesalers' fleets ran on diesel. Since wholesalers did not have stockpiles of fuel, "we see a potential problem looming".

The Department of Health yesterday said there had been no shortage of medicines yet, despite the strike by pharmaceutical and transport workers. "We are continuing to monitor the situation nationally in terms of the impact on our supplies," spokesman Fidel Hadebe said.

Meanwhile, the end may be in sight to the strike by engineering and metalworkers, now into its second week. The Metal and Engineering Industries Bargaining Council announced late yesterday that after intensive bilateral talks between the National Union of Metalworkers of SA and the Steel and Engineering Industries Federation of SA, an employer body, the parties had reached an in-principle agreement to end the strike. The parties were reporting to their structures and members, it said. With Sapa