Dar es Salaam — Some fuel dealers have launched a campaign to have the Energy and Water Utilities Regulatory Authority (Ewura) disbanded over stringent regulations they view as anti-business.
The campaign involves a number of MPs and influential fuel dealers, who are plotting a move to have Parliament push for reforms to either restructure the agency or curtail its powers.
The traders are unhappy about fuel marking and hefty penalties imposed on marketers violating rules governing the sector, according to details gathered by The Citizen.
Those acting on behalf of the businessmen are understood to have already lobbied several MPs.
Sources in Dodoma told The Citizen that the powerful fuel dealers, backed by some MPs, want the government to discard the fuel marking system meant to discourage the diversion into the local market of transit fuel and curb tax evasion.
"They are here moving around, trying to lobby us to accept their suggestion that Ewura be disbanded or stripped of some of its powers. I have rejected the idea and cannot be part of their scheming," said an MP attending the ongoing parliamentary sitting, who asked not to be named.
It is, however, not the first time that such a campaign has been attempted to take the sting off the stringent rules governing the fuel marketing business. Similar efforts a few years ago failed when the government stood firm against calls for self-regulation.
Inquiries by The Citizen showed that the lobbyists are particularly opposed to fuel marking, which is an Ewura initiative that has shown good results in combating fuel adulteration and tax evasion and promoting fair competition in the multi-billion-shilling industry. Yesterday, an lawmaker involved in the fuel business admitted that he was among those campaigning against Ewura's crackdown.
Gairo MP Ahmed Shabiby accused the agency of "unfairness and recklessness" in enforcing standards. Mr Shabiby, who also owns a bus company and several fuel stations, was last week slapped with a Sh 7 million fine for reportedly selling transit fuel at one of his filling stations.
He told The Citizen by telephone that he had already taken up the issue with Energy and Minerals minister Sospeter Muhongo.
Mr Shabiby accused Ewura officials of applying double standards in their inspection.
"I buy fuel, let's say, from OilCom. I hire a transporter who sends a driver to deliver the cargo. Before the tanker leaves, Ewura officials would come and mark the fuel. Mind you, the tanker is not mine... I have just hired it. So I, the buyer, is not involved at that stage.
"But at the end of the day Ewura officials would visit my station with samples of fuel in their hands. They test the same fuel which they had marked earlier and tell us that it is substandard." He said documents certifying the movement of the same cargo from the depot to the stations are not considered.
Mr Shabiby said he was a long-serving MP and had witnessed many flaws in the way Ewura deals with fuel traders.
"Yes, I'm in this case, and will pursue this matter to the end. If they can do this to a leader, what about ordinary Tanzanians?" he asked.
Yesterday, the chairperson of Parliament's Energy and Minerals Committee, Ms Martha Mlata, said the panel had not received an official complaint from fuel dealers.
"As you are aware, the committee was formed last week... so it has yet to sit. If such a complaint has been lodged, I promise that we will handle it without fear or favour.
"Once it comes to our attention we shall summon Ewura and the complainants to hear from them so that at the end of the day justice prevails," she told The Citizen by telephone.
But Ewura officials were of the view that those campaigning against the agency had benefited from past loopholes in the fuel business that earned them billions in illicit profits through fuel diversion and tax evasion.
"The recent case in which the anti-corruption agency charged Lake Oil company with evading tax to the tune of Sh8 billion by diverting into the local market fuel meant for export is a case in point," said a middle-level official, who requested for anonymity because he was not the agency's spokesperson.
Contacted for comment, Ewura Public Relations and Communications Manager Titus Kaguo defended the agency against the accusations, saying Ewura did not target any particular marketer in their day-to-day operations.
"We are not out to frustrate fuel dealers, but our regulatory mandate is hinged on principles and laws applicable in the sector. The problem comes when these dealers want to violate the rules for self-gain," he said, adding that the agency was unaware of the lobbying in Dodoma.
Before the introduction of fuel marking, unscrupulous fuel dealers were benefiting from diversion by offloading and selling in the local market huge quantities of transit fuel. With the success in fighting adulteration and under-declaration, fuel dealers resorted to transit fuel, which is not taxed in Tanzania.
Adulteration levels peaked in the mid-2000s when the country faced a near-crisis before Ewura was given the powers to streamline the sector. Ewura statistics show, for instance, that 75 out of 100 fuel stations from which samples were taken for testing then were found to have been selling adulterated to unsuspecting motorists.
Adulteration was then common in Tanzania, with traders taking advantage of lower kerosene prices to mix it with petrol or diesel. However, less than ten out 100 samples were found to have been adulterated last year.
Crooked fuel dealers also under-declare the quantity of fuel imported to profiteer with the help of corrupt officials at the port and Tanzania Revenue Authority.
It was not unusual, for instance, for a dealer who imported 30 million litres of petroleum to declare 15 million litres or less.
Ewura's intervention established a huge disparity between what was imported and what was consumed locally. This meant that the government was losing tens of billions of shillings in unpaid tax.
Fuel marking thus sealed most of the loopholes used by cartels