Fuel franchise dealers cry foul, as CFTC probes
Some local petroleum franchise dealers have asked Malawi Energy Regulatory Authority (Mera) and relevant authorities to address challenges and enforce energy laws in liquid fuel and industry.
The dealers allege that conditions which some petroleum companies are imposing on the franchise dealers are unfavourable, leading to loss of property by the dealers.
In a document seen by Business Review, the dealers claim that some of them are finding it tough to run service stations, forcing some to sell their properties and surrender their stations after incurring overdrafts with no visible profits from the business.
The dealers say they expect to, among others, address the marginal fee which dealers are charged, but vary from company to company.
The fee is charged on profits made on the fuel station shop and losses encountered on fuel delivery.
The dealers have also petitioned Competition and Fair Trading Commission (CFTC) seeking its intervention on fair trading practices and anti-competitive tendencies.
In Malawi, fuel service stations have almost uniform prices when Mera recommends a national pump price.
CFTC executive director Charlotte Wezi Malonda, in response to an e-mailed questionnaire this week, said they have commissioned a market inquiry to assess the state of competition in the liquid and gas fuel industry.
She said the study is in its final stages and the report of the inquiry will be released soon.
Said Malonda: “The inquiry has not only focused on individual firms, but the whole industry. Specifically, the inquiry looked at how the structure and conduct as well as the regulatory environment affect competition in the oil industry.”
Mera senior consumer and public relations officer Fitina Khonje said in an interview recently the energy regulator gave a six-month transition period to all petroleum companies to comply with the new by-laws.
She said Mera hoped the franchising and dealership by-laws will respond to the need for reforms in the liquid fuels and gas supply industry downstream market by restructuring it, encouraging greater private sector participation and localisation of retail outlets through affirmative action. n
