Subletting fuel retailers irate over Total (T) margins slash

03Aug 2020
Francis Kajubi
Dar es Salaam
The Guardian
Subletting fuel retailers irate over Total (T) margins slash

FILLING station operators have filed complaints with the Energy and Water Utilities Regulatory Authority (Ewura) over the deduction of their earnings from the fuel margin by a major oil marketing company —Total.

The dispute came up after Total slashed between 22/- and 67/- of the fuel retail margin per litre since June, reducing the earlier profit margin placed at 105/- per litre.

Ewura’s Communications and Public Relations manager, Titus Kaguo, told The Guardian yesterday that the regulator has since directed Total to refund the dealers the deductions effected.

“We furnished Total with a compliance order to refund the dealers as the deductions were made unprocedurally,” he said.

But the head of Legal and Corporate Affairs at Total (T) Ltd, Marsha Kilewo denied the accusations, saying that the deductions were affected based on clauses in contracts it signs with dealers.

A city fuel dealer said that apart from illegally taking the money from them, Total has been deducting the money without paying tax on it.

“We estimate that the government has been losing around 105.7m/- a year from key fuel stations acquired from the defunct Gapco by Total. The different tax invoicing model is being used as a way of denying taxes to the government;” he declared, demanding anonymity.

“Before the deduction came into effect in May there was one tax invoice. But Total is now bringing us different tax invoices where one invoice features those deductions and the other doesn’t,” he elaborated.

Other dealers in Dodoma, Tanga and Morogoro raised the same complaint that the retail fuel margin is meant for retailers with no deductions.

Earlier Kaguo said that the basis is tied to EWURA’s petroleum products price setting rules, GN No. 5/2009 with amendments in GN No. 269/2018.

“We have confidently ordered Total to abolish such deductions but instead of doing so, they have been going to the Ministry of Energy trying to find ways of solving the issue in their favor since the contracts they made dealers sign contradict the regulator’s conditions,” he further noted.

TRA Director of Information Richard Kayombo said that TRA obtains taxes as soon as oil enters the country. “If those complainers have other issues - may be levies - then the right authority they should seek is EWURA.”

Kilewo said that everything inn how the company works with dealers “is stipulated in the contract clauses they signed with Total three years ago.”

Total acquired Gapco in 2017 with over 70 fuel retail stations, with Total opting to operate the stations by selecting a third party to do the same on its behalf, while retaining both wholesale and retail licenses from EWURA.

“We work with dealers under the marketing agreement license where dealers get into Total’s business as just sellers of the product at our stations. The retail margin is given to the license owner that is Gapco, thus dealers from ex-Gapco fuel stations obtain a uniform amount of 67/- per litre as fuel margin which is free from VAT, in the allocated 105/- retail margin as set out by EWURA,” she added.

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