Fuel Retailers Association

The Association started from very humble beginnings in 1998 with about 10 members to now bolstering a membership over 2500 Members. The Association has played a vital role since its inception in bringing to the public and stakeholders the challenges facing the South African Fuel Retailers.

The Association has without fail proved to be the voice of the fuel retailing industry.

1. Fuel Retailers Association//Minister of Energy and 8 Others (Regulatory Accounts System Implementation)

The Association has recently taken the Minister of Energy and the Controller of Petroleum on a legal review of the new retail margin determination model commissioned by the Department of Energy. We are very proud that for the first time there is a model which is scientific on which future retail margins will be based on but we are not happy with the way of its implementation which condones Oil Companies from clawing back from the Fuel Retailers’ Trading Margin or Entrepreneurial Compensation which is intended to compensate them for the provision of services associated with operating service stations. The relief sought is that this element of the margin be exclusively designated for the purposes it was intended for. Uncontrolled claw backs from the Oil Companies and other Independent Wholesalers will result in the long term erosion of the retailers’ profit margins and viability. This is something the Association cannot leave unattended, in line with its vision and mission

2. Fuel Retailers Association//National Consumer Council Complaint

This matter deals with the submission to the National Consumer Council [“NCC”] by the FRA of a complaint regarding the prevalent iniquitous practice by some franchisors of terminating lease and/or supply agreements with member franchisees, and subsequently granting supply agreements to landlords or other third parties, leaving franchisees without recourse to compensation.

After a meeting with the Fuel Retailers Association [“FRA”], the NCC indicated that they would prepare a formal recommendation to the Minister of Trade and Industry in terms of Section 98 of the Act.  The recommendation would specifically request the Minister to investigate the issues raised in the complaint lodged by the FRA with the view to develop policy and ultimately a legal framework to deal with issues raised in the FRA’s complaint.

3. Fuel Retailers Association // Motor Industry Ombudsman (MIOSA).

MIOSA argue that the fuel sold by our Members constitutes a vehicle accessory as fuel is purported to clean, repair and maintain your engine and that oils sold are purported to be active cleansing agents.

a. Even if fuels and lubricants had the effect of cleaning, repairing or maintaining engines, they remain fuel and lubricants. On MIOSA’s own reasoning, fuels and lubricants that did not market themselves to have such qualities would not qualify, this distinction would plainly be ridiculous. 

b. The sale of such fuels and lubricants would be ancillary to our Members’ principal business of selling fuel. We have therefore submitted that in order to qualify under the Automotive Industry Code, the primary business of the relevant retailer must fall within the definition – a retailer who retails completed components and/or accessories to motor vehicles. 

c. We were successful in our application to join the Minister of Trade and Industry (“the Minister”) as a Second Respondent to the main application. The purpose of doing so was to bring a counter application against the Minister for the following reasons:

d. The Minister is responsible for the administration of the CPA promulgated Automotive Industry Code (“the Code”);

e. The CPA empowers the Minster to prescribe an industry code which may provide for a scheme of alternative dispute resolution. However, the CPA does not authorize the Minister to prescribe the means of funding an industry ombud. Section 82(6) of the CPA empowers the NCC to recommend the accreditation of an ombud only when that scheme is “adequately situated and equipped”. Therefore, the ombud must be adequately equipped before it is accredited, it cannot become adequately equipped as result of its accreditation (for example, through levying the types of contributions as contemplated by the Code); 

f. There is no question of voluntary affiliation to MIOSA or voluntary contributions, payment is mandatory if the broad definitional requirements of the Code are satisfied (that Fuel Retailers fall under the definition of the Automotive Industry in that they retail “completed components and/or accessories to…motor vehicles”).

g. It has consequently been submitted that the provisions of the Code that require those who fall within the definition of “Automotive Industry” to pay mandatory contributions to MIOSA are ultra vires and fall to be reviews and set aside.

The Association also played a crucial role in the concluding of the 2016 Wage Negotiations under the Motor Industry Bargaining Council. The key interventions between NUMSA and  FRA, saw the finalisation of the 3 year wage agreement without any strike – a historical event. Traditionally NUMSA has used the intensified strike in the fuel service stations to bring about a settlement agreement for the entire Motor Industry. The Association continues to participate in key and strategic industry forums and initiatives in order to table the views and perspective of fuel retailers. The Association has been invited twice in Parliament to present its position on the impacts of Vertical Integration in the Liquid Fuels Value Chain. The Association has been instrumental in all aspects relating to marketing and supply of fuel and convenience retailing. It continues to successfully defend its Members on various contractual matters with Oil Companies and the Wholesalers. It has successfully defended numerous cases against it Members at the DRC and CCMA via its knowledgeable Industrial Relations Representatives.

In 2015, the Association launched its first and very successful Conference under the theme “ Equipping for Change”. This was run alongside the Automechanika Trade Show. The Association is intending to host a follow up Conference in September 27th – 28th in 2017 under the Theme “Unity in Action”

There are many more achievements that the Association has made over its history and it will not be possible to list them all here. To join and know more about us, visit how to become a member page on this website under Member tab.