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Cape Town - Fuel retailers who run wholesale and retail businesses from the same premises can face fines of up to R1m or prison sentences of up to 10 years.
This appears from a document in Fin24's sister publication Sake24's possession in which a fuel retailer was warned by the department of minerals and energy that it's illegal to sell fuel wholesale and run a filling station on the same premises.
A fuel retailer in North-West, who runs a family business, says that he and his wife, with whom he's married out of community of property, have now split their fuel business into two companies - one for the wholesale business and the other for the retail activities - in an effort to comply with the new legal provisions. One business is now in his name and the other in his wife's.
However, according to the department this is still illegal in terms of the Petroleum Products Amendment Act of 2003, because such a business is regarded as a wholesaler who also has a retail licence.
The department has warned businesspeople who follow this practice that they run the danger of losing their fuel trading licences.
The retailer, whose name is being withheld for legal reasons, believes it's a violation of his human rights if he's not allowed to expand his family business.
"It's not a crime; it's a business."
The dealer says his combined fuel turnover is 10m litres a month. His wholesale business supplies diesel to farmers, mines and subcontractors in the area.
The department was approached for further comment, but has failed to respond.
Peter Morgan, head of the Fuel Retailers' Association, which represents the interests of thousands of filling-station owners, insists that the department is acting correctly.
"You can't have it both ways," he says. Wholesalers must be run as wholesalers and retailers as retailers. Many retailers believe they can get away with it, but they're breaking the law.
Morgan says that the problem is one of the fundamental reasons why fuel retailers wanted a clear distinction between retail and wholesale activities. In the past, the large international oil companies were also involved in retail and wholesale activities - which means they had their bread buttered on both sides.
The law now states that the holders of wholesale licences may only have a retail licence as well if the filling station is used for training purposes. This provision excludes wholesalers and retailers selling liquid petroleum gas and paraffin.
Morgan says the Act is clear in its definition of wholesale - the selling of 1 500 litres of fuel or more per transaction.
If a wholesaler sells less than 1 500 litres directly to the public, he's considered to be doing retail business and will then be contravening the provisions of the Act.