Engen accused of fuelling racial disparities in fuel allocations

Engen accused of fuelling racial disparities in fuel allocations PICTURE: DAVID RITCHIE

Engen accused of fuelling racial disparities in fuel allocations PICTURE: DAVID RITCHIE

Published Sep 23, 2023


In a damning revelation, petroleum giant Engen is under fire for allegedly sidelining black-owned fuel companies, leaving them to grapple with the remnants while white-owned companies allegedly feast on the bulk.

Black fuel resellers, who spoke to IOL on condition of anonymity as they fear losing the rest of their business, claim that a staggering three to four million litres of product are consistently allocated to white owned businesses, leaving a void for others.

The allegations don't stop there. Engen's downstream products, once a thriving sector for diverse players, is now said to be monopolized by these white-owned firms, pushing previous beneficiaries out of business.

The allegations are contained in an extensive complaint laid with the Competition Commission and has been seen by IOL.

A number of customers have also raised the alarm on what they describe as a blatant display of favoritism. They allege that while rebates for black-owned enterprises have been slashed, select Engen customers, predominantly white-owned, have enjoyed consistent rebates over the years. This disparity, they argue, began when a new white manager, who manages the Reseller Business at Engen Petroleum limited took over the position.

These resellers, in a candid conversation with this IOL, painted a grim picture: "We're in a battle for survival in this industry."

They further allege that Engen offered pre-buys exclusively to selective customers during huge price hikes granting them an unfair pricing advantage in the market.

Directors of black-owned companies, speaking on condition of anonymity for fear of retaliation, told IOL that the situation has deteriorated sharply in recent months.

"Engen holds our contracts by a thread. Speak out, and they'll snip it," one director remarked, adding that after a decade in the industry, the current climate is the most challenging he's faced.

"Stand up to them, and you're crushed," he lamented.

Another customer disclosed to this publication that a staggering 90% of truck stops and distribution companies are in the hands of white owned companies, with some having ties to former Engen employees.

"Since last December, our rebates were slashed by 21.0 cents per litre. Yet, Engen agents dangle better diesel prices in front of us. When we challenge them, they claim distribution companies remain unaffected. This isn't just unfair; it's a death knell for our businesses," the reseller said.

Engen, however, has come out swinging against these allegations. In a statement, the company said, "Engen categorically denies these unfounded accusations. Our business decisions are rooted in ethics, corporate values, and compliance. We invite those behind these anonymous claims to come forward. We're open to addressing their concerns transparently."

Engen also highlighted its anonymous Ethics Line for reporting any irregularities, urging individuals to use it if they have genuine concerns.

Engen has meanwhile denied the black resellers’ claims.

“Engen denies the baseless allegations of impropriety, which are false and misdirected.

Ethical considerations, corporate values, and compliance, inform all our business decisions. We welcome a meeting with the nameless people making the allegations to address their concerns in an open and transparent manner,” the fuel giant said.

“We also operate an anonymous Ethics Line (0800 11 12 12) to report fraud, theft, misconduct, or other associated irregularities and/or suspicion of these activities,” Engen said.