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BusinessAuthority, fuel dealers lockhorns over perplexing crackdown

Authority, fuel dealers lockhorns over perplexing crackdown

The Ethiopian Petroleum and Energy Authority has doubled-down on administrative measures, suspending operations of 40 gas stations for a month, and giving a final ultimatum to another 57 stations, which were all found selling fuel in cash, outside the designated digital platforms.

The Authority, tasked with regulating petroleum products market and distribution, claimed to have discovered 40 stations who had been selling less than half of their fuel supply without the designated digital platforms. The 40 fuel stations belong to 12 oil companies.

The Authority came to the conclusion after conducting an audit in two cities, Addis Ababa and Shaggar City of the Oromia Regional State. Densely packed with fuel stations compared to other cities, the two cities harbor 225 stations, constituting 25 percent of the nation’s fuel stations.

Government has introduced mandatory system that obligates all fuel distributors and dealers to make all the transaction through mobile money applications of Telebirr, CBE, or COOP. Since early this year, distributors and dealers are forbidden to use cash for the fuel transaction. Only distributors and dealers registered on these applications are eligible to access petroleum products from the state owned supplier, Ethiopian Petroleum Supply Enterprise.

Result of the audit, conducted for a month from September 21 to October 22, 2023, revealed that an additional 57 stations were selling only 50 to 80 percent of the supplied fuel with the Telebirr, CBE, or COOP platforms recognized by the Authority, prompting the officials to give them a final ultimatum.

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As per the authority’s decision through a letter signed by the its Director General, Sahrela Abdullahi, the forty fuel stations will be banned from accessing petroleum products for one month starting from November 06, 2023.

However, petroleum dealers are objecting the Authority’s verdicts, claiming a system default and wrong information from ethio telecom’s Telebirr may have misled the Authority to come up with the harsh measure.

“Let alone 40; there can’t be a single station selling less than 50 percent in the digital applications. This is totally wrong,” a dealer closely following the development with the Authority told The Reporter on the condition of anonymity.

“They didn’t even see our transaction; they just went to Telebirr and received incorrect information,” the dealers said, implying a possible lawsuit to follow on the Authority for suspending them from operation. “It is 100 percent wrong information,” he added.

An official from the Authority disclosed that a few gas stations were also found selling fuel on the digital systems over the amount they were supplied. “This showed that they procured the fuel without the proper system in the first place,” the official said.

Officials at the Authority are re-auditing the findings again as they are facing several objections from the dealers and their respective companies. “We are re-auditing them again for possible changes in the decision,” the official told The Reporter.

Yesterday, on Friday, November 10, 2023, the Authority requested ethio telecom to clarify the transaction information on several of the gas stations.

The Reporter reviewed the letter, which lists the names of 15 stations gas stations where the Authority could have wrongly passed the suspension decision on.

“There are concerns regarding the data for the listed stations. We kindly request a recheck of their sales transations,” reads the letter signed by Deresa Kotu, Director of Petroleum Distribution at the Authority and addressed to ethio telecom.

Four days before that, Sahrela addressed 12 oil companies, whose 40 stations have been caught selling fuel in cash, and notified them the names of the stations along with the measure taken.

“It is decided that for a month beginning from the day this letter was issued, the stations won’t be supplied with any fuel,” reads the letter.

Over 27 percent of the stations receiving a month ban belong to the National Oil Company (NOC), while those working with OLA Energy account for over 22 percent. TotalEnergies and Yetebaberut follow suits accordingly.

One of the gas stations to be re-audited, rechecking the data with ethio telecom’s Telebirr, is that of Arsema Hagos’ near Mechare Meda, who is working with NOC.

Owner and general manager of the Mechare NOC station, Arsema claims to have made a transaction of 100 percent through Telebirr and an e-card (recognized by Telebirr). Her pumping stations made a little less than 40 thousand transactions during the audited one-month period.

“The next morning, I wrote the letter to the Authority and concerned offices with all the data from the system,” she explained. “We have come to an agreement that a mistake was made with my station because we managed to confirm that I sold 100 percent digitally.”

Confused of why the decision isn’t yet reversed with her station after the officials at the Authority admitted to having her listed wrongly, she awaits the reconsideration.

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