Why Ewura wants to shut five fuel firms

Friday June 26 2020

 

By Alex Malanga @ChiefMalanga amalanga@tz.nationmedia.com

Dar es Salaam. The Energy and Water Utilities Regulatory Authority (Ewura) yesterday announced its intention to revoke the licences of five fuel marketing companies over allegations that they were causing artificial shortages of petroleum products in the country.

The companies include Moil, which held the fifth position in terms of market share during the 2018 calendar year, accounting for 6.5 percent of the pie, according to Ewura figures.

The list also includes Olympic Petroleum Tanzania Limited, which held the 21st position in terms of market share. It had a 1.0 percent market share.

The remaining three are operators of petroleum filling stations. They include B.O Five Ways Petroleum Stations of Bagamoyo, Mexon Energy Limited of Makambako and Mexon Energy of Njombe Urban.

“It won’t take long before we revoke licenses of these operators. We are announcing the intension because we are required to do so under the Ewura law, rules and regulations,” Ewura communications and public relations manager, Mr Titus Kaguo, said in Dar es Salaam yesterday.

Ewura says the five operators were hoarding petroleum at this time when prices have gone down thereby creating artificial shortages and unnecessary panic among some consumers of the product.

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Prices of petroleum products have been going down during the past few months as Ewura responds to declining global prices, occasioned by a reduction in demand as industrial output in major economies remain low due to the Covid-19 pandemic lockdowns. Earlier this month, Ewura cut petrol and diesel prices by 18.65 percent and 16.25 percent respectively.

Currently, Dar es Salaam motorists pay Sh1,520 only for every litre of petrol and Sh1,546 for a litre of diesel.

This is the lowest price to have been attained in a period of about ten years and six months.

The drop has however seen some marketers deciding not to sell the product, according to Ewura, prompting the government to act.

Ten companies have since been issued with compliance order over what Ewura describes as ‘fuel hoarding’.

“We issued a compliance order on Monday, June 22, 2020, demanding the ten companies to explain – within 48 hours – why no action should be taken against them for causing fuel shortage in some places,” he said.

The regulator was however not convinced with explanations from the five companies, forcing it to issue the license revocation intention.

Two of the remaining five companies, have been issued with warnings. They include Oryx and Mogas.

With a market share of 14 percent, Oryx is the country’s second largest oil marketer while Mogas comes on position 13th with a two percent market share.

Star Oil, which comes in tenth position with a 3.4 percent market share, remains under Ewura’s investigation.

The regulator was however satisfied with explanation by Camel Oil.

One company, Mtweve Oil of Chunya in Mbeya has been suspended for selling petroleum products beyond Ewura approved price caps.

The company has also been slapped with a Sh6 million fine. “We have also submitted the case to Tanzania Revenue Authority because it also came to our attention that it was selling petroleum products without issuing receipts to customers. Upon adhering to these regulatory requirements, they will be allowed to reopen,” said Mr Kaguo.