Joseph Mwamunyange
12 October 2008
Nairobi — The powers of Tanzania's influential utility regulator, the Energy and Water Utilities Regulatory Authority (Ewura) have been put to the test in a precedent-setting case in which a magistrate's court in Morogoro moved to stop the regulator from proceeding against a number of petrol stations found selling adulterated fuel.
The case is becoming a cause celebre as it represents one of those rare occurrences where a magistrate's court overrules a body with powers and jurisdiction comparable to the powers of the High Court of Tanzania. It has also jolted Ewura's high-profile campaign to curb the rising incidence of adulterated fuel in Tanzania.
The regulators had ordered the service stations closed. But with the reprieve, the stations in question will continue to sell petroleum products despite the fact that laboratory tests undertaken by Ewura showed traces of adulteration.
"We have to respect the court injunction issued by the Morogoro Magistrate's Court because saying anything would be contempt of court," Ewura Director General Haruna Masebu told The EastAfrican.
The injunction was issued by Resident Magistrate Amri Msumi after an application lodged before the court by National Oil Tanzania Ltd was heard ex-parte.
According to information obtained by The EastAfrican, the operation that led to closure of the service stations in question was a joint exercise between the Tanzania Revenue Authority and Ewura.
Among the service stations that benefited from the reprieve are Oil Com at Kihonda, Kobil and Camel Oil at Msamvu, Kobil on the Dodoma highway, Petrol in Sokoine area and Oil Com at Nane Nane.
Minister for Finance and Economic Affairs Mustafa Mkullo recently lamented the fact that revenue from the petroleum sector had dropped and directed the TRA to redouble its efforts to collect more government revenue from the lucrative sector.
However, the injunction by the Morogoro court means that the momentum gained in the fight against adulterated fuel and dumping will be lost as such products continue being sold until such time as the legal issue is sorted out.
According to Part VII (Enforcement and Compliance) Section 39 (1) of the Energy and Water Utilities Regulatory Authority Act, "Where the Authority is satisfied that a person has committed or is likely to commit an offence against this Act or sector Act it may make a compliance order under this section."
It further states in Section 39 (6) that: "Notwithstanding any law to the contrary, the provisions of this Act where an order or a certificate is produced or submitted to the High Court, the order or a certificate shall be conclusive proof of its making by the High Court and of the facts to which it relates."
This law was enacted bearing in mind the legal implications that would arise if cases in the sector were to be dealt with by the normal bureaucracy in the court system.
On Friday, Chief Justice Augustino Ramadhan said he had sent people from his office to Morogoro to get to the root cause of the issue at hand.
The saga began when inspectors from Ewura conducted inspections in Morogoro Municipality and discovered after laboratory tests that some service stations were selling adulterated fuel.
The inspectors sealed some of the petrol stations but some owners broke the seals and continued with their business and, when the inspectors went to effect closure of the petrol stations, they were presented with the injunction from the magistrate's court.
Between May last year and August this year, Ewura conducted inspections in 14 regions including Dar es Salaam, Arusha, Kilimanjaro, Mwanza, Mara, Shinyanga and Coast.
Other stations inspected were in Manyara, Kagera, Dodoma, Iringa, Tabora, Kagera, Tanga and Morogoro. Close to 50 per cent of the 130 petrol stations inspected were found to be selling substandard fuel amid reports of rampant mixing of diesel with kerosene at many service stations.
In January, the Ewura director general told The EastAfrican that the Authority would introduce tamper-proof technology for road tankers in order to curb malpractices in the petroleum sector.
In addition to higher costs, road transport of these hazardous petroleum products is one of the most unsafe modes. Adulteration and illegal mixing of different petroleum products are the most common problem linked to transportation of petroleum products, said Mr Masebu.
He said most businessmen in the sector were willing to work with Ewura, because all companies that operate in an ethical manner suffer from adulteration due to the distortions it introduces into the pricing mechanism, with adulterated products being cheaper but hazardous.
Ewura has not in the past hesitated to close down service stations that have been found breaking the law. In January, more than 10 petrol stations in Arusha and Moshi were ordered closed down after the owners were seen to have been operating against the law.
Thirteen other stations paid fines totalling Tsh39 million ($37,000) and were recommended for reopening.
A further nine stations in Morogoro and Dodoma were fined Tsh37 million ($35,000). Some service stations in Morogoro complied with the Ewura order but applied for retesting at their cost, while others remained shut until they paid the fines.
Since kerosene is about Tsh40 cheaper per litre than other products, it is mixed with diesel by unscrupulous traders; indeed, Ewura has in the past advised the government to remove this incentive on kerosene since the wrong people are benefiting. The government has been subsidising kerosene so common people can afford it.
Inspectors from Ewura get the signature of every petrol station inspected on three samples; while one sample is retained by the station, one is taken for laboratory testing and the third one is retained by Ewura.
An inspector with EWURA said that whatever samples they took were in agreement with the petrol station owners and in accordance with what the stakeholders and Ewura had agreed upon.
"We adhere strictly to sampling and testing rules; if anybody is unhappy with whatever we decide, they are free to go to the Fair Competition Tribunal," said the inspector.
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