Tanzania: EWURA should address the fuel retailer’s concerns

14 October 2014, Dar es Salaam – Some operators of fuel pump stations operating in the country are urgently requesting Energy and Water Utility Regulatory Authority to intervene and address their concerns over sharing of a 92/- per litre retailer’s margin.

The operators who met in Dar es Salaam last weekend are those affiliated to Puma Tanzania Limited, Gapco Tanzania Limited and Total Tanzania Limited and fall under Company Owned Dealer Operated (CODO) model.


The operators grouped as Tanzania Petrol Stations Operators Association want Ewura to use its regulatory powers to force the three companies stop confiscating 52/- per litre of their retail margin which includes profit and depreciation of property.

One of Tapsoa members, Mahfoudh Maulidi told journalists that the utilities regulator has mandatory powers to solve the problem which has been existing since last year when Ewura introduced the new price model.

“An Act which established Ewura gives the authority powers to regulate the petroleum sector while the parent ministry simply looks at policy issues,” said Mr Maulidi.

This, he said, was why Ewura was publishing Cap prices for petroleum products since 2009. He said Ewura which also publishes monthly indicative prices for petroleum products to stop oil marketing companies’ push for super profits has an obligation to ensure that pump station operators under CODO are not being victimised.

Ewura Director General, Felix Ngamlagosi said the authority has officially received complaints from pump station operators working under Puma, Gapco and Total.

“These CODO operators are against the 40/- per litre payment which they get from their landlords,” said Mr Ngamlagosi. Nyamlagosi said Ewura is still mediating the row and that after commissioning Ernst & Young to undertake a study into the sub sector, a solution will be found soon.

“We hope this conflict will be resolved amicably soon,” the Ewura chief noted. In November 2013, Ewura amended the Petroleum Pricing Formula whereby the wholesalers margin was maintained at 124/- per litre but split into two line items; 106/- per litre as oil marketing company’s overheads and margins and 18/- per litre as charges payable to other local authorities and executive agencies.

Furthermore, the retailers’ margin was increased from 64/- per litre to 92/- per litre which is split into two line items; 40/- per litre as retailers’ operating margin and 52/- per litre as retailers’ return on investment and depreciation.

Following a split of the retailers’ margin, complaints were raised by some dealers operating petrol stations owned by Oil Marketing Companies (OMCs).

According to these dealers, OMCs paid the dealers 40/- per litre to cover for retailers operating margin while the OMCs retained the remaining 52/- per litre as return on their investment and depreciation as stipulated. “OMCs argued that they are guided by the split of the retailers’ margin as provided in the current Petroleum Pricing Formula.



– Tanzania Daily News

About the Author