Africa-Press – Lesotho. PRESSURE is piling on Engen Lesotho and Puma to give contracts to local transport companies and hire Basotho senior managers. The Lesotho Truckers Association this week asked the Minister of Natural Resources, Mohlomi Moleko, to push the companies to localise fuel haulage contracts and top positions.
In a letter sent to Moleko last night, the association accused Engen and Puma of violating the government’s oil industry localisation policy by continuing to use South African transport companies. The letter has also been sent to Prime Minister Sam Matekane, Transport Minister Matjato Moteane and the Petroleum Fund.
It comes three weeks after Engen triggered a firestorm for inviting eight South African companies to bid for the contract to transport bulk petrol and diesel from the Durban Port to Lesotho and filling stations across the country.
The move is seen as yet another attempt to marginalise locally-owned companies and reverse the few gains achieved by the localisation policy. The tender closes on October 3.
thepost can reveal the association’s concerns will be top of the agenda when Moleko meets Engen and Puma executives early next week. Government sources said Moleko has been trying to meet the oil executives since Engen issued the tender.
The association said Puma has continued to use South African companies despite the 2016 policy to hire local transporters. “Also, take note that Lesotho fuel hauliers are never invited to participate in South African tenders, but Engen and Puma invite South African fuel hauliers to tender in Lesotho.
The association also accuses the oil companies of cheating the system by including handling and storage fees into the prices that customers eventually pay at the pump.
According to industry regulations oil from Durban should be offloaded and stored at the main depots before distribution to filling stations. This makes up the handling and storage fees that the companies charge to customers.
Yet for the past few years, Engen and Puma have been forcing transporters to deliver straight from refineries to local filling stations. Transporters say they are often forced to keep the oil in their tankers while waiting for instructions on where to deliver.
They say this practice essentially means they are the ones carrying the storage and handling costs but it is Engen and Puma that pocket the fees when the customers pay.
Although a few cents per litre the handling and storage fees amount to hundreds of millions of maloti in profits for the companies. One industry insider estimates the companies could have made more than M100 million since the practice started in 2016.
Engen, for instance, delivers millions of litres of fuel directly from the refinery to a local mining company but its prices include storage and handling fees whose cost it doesn’t incur.
“In our view, the Ministry of Energy (Natural Resources) must impose fines because this in simple terms is exploitation of local transporters, whose trucks are turned into storage tanks by oil companies and the practice too, is in violation of the law,” said the association’s letter.
The association said it was calling on the government to enforce its localisation policy to stop the marginalisation of local companies. It also alleged that in addition to side-lining locals who qualify to manage the companies, Engen is also allegedly violating labour laws subjecting local staff to polygraph tests when they are suspected of wrongdoing.
Puma and Engen are also accused of maintaining what are essentially satellite offices in Lesotho while the bulk of their operations like procurement and sales are managed from South Africa.
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