Mnangagwa's fuel price hike done illegally

LEGAL think-tank, Veritas yesterday said the now infamous fuel price hike announced by government a fortnight ago was illegal as the prices were fixed by Energy minister Joram Gumbo instead of the fuel sector regulator as per law.

President Emmerson Mnangagwa announced the new prices nearly two weeks ago, torching countrywide protests that lasted the whole of last week. The protests resulted in the deaths of 12 people, according to lawyers and human rights groups, while 78 were treated for gunshot wounds and over 700 arrested as State security agents clamped down on the alleged violent protesters.

Veritas said SI 10 of 2019 was in contravention of the Petroleum Act as the new fuel prices were illegally fixed by the Energy minister instead of the Zimbabwe Energy Regulatory Authority (Zera).

It said the law also required that the new fuel prices be gazetted, which was never done, and they also raised a red flag over another SI 9 of 2019 which also raised duty on fuel products.

SI 10 of 2019 was published by Gumbo to set out the formula by which fuel prices would be fixed on the same day that Mnangagwa announced the new fuel prices.

"The SI may be ultra vires the Petroleum Act under which it was made because it was purportedly made by the minister after consultation with Zera, but section 54 of the Act states that Zera, after consultation with the minister, must prescribe the prices for petroleum products," Veritas said in a statement.

It said the Statutory Instrument was made by the wrong person (Gumbo).

"The SI does not mention the new fuel prices announced by the President on January 12 of $3,31 per litre for petrol and $3,11 per litre for diesel, and the President did not mention Zera when announcing them," they said, adding that if Zera did not fix the prices, then they were invalid.

Veritas said although Zera posted the new fuel prices on its website three days after Mnangagwa announced them, it still has not published the new prices in a national newspaper or in the Government Gazette as required by law.

"When Mnangagwa announced the new prices, he said that foreign missions and tourists would be able to buy fuel at designated garages for special prices at US$1,32 per litre for petrol and US$1,24 per litre for diesel fuel, but neither the SI nor Zera's website mentions these special prices," Veritas said.

It also said the special prices were not sustainable in view of the fact that on the same day as Mnangagwa's announcement, another SI 9 of 2019 under the Customs and Excise Act raised duty on petrol to US$2,31 per litre and on diesel fuel to US$2,05 per litre, which points to that the duty must be paid in United States dollars, exceeding the special prices announced by Mnangagwa.

"The confusion is made worse by the President reportedly having said these prices are predicated on the ruling official exchange rate of 1:1 between the bond note and the United States dollar. This statement and the two-tier pricing announced are contradictory," Veritas said.

SI 10 of 2019 stipulated, among other issues, that procurement licensees must not sell fuel at more than $0,10 cents profit margin per litre.

"Any person who is found selling petroleum products above the prescribed wholesale price or retailing price as prescribed by the authority, or fails to display the current and corresponding prescribed prices of petroleum products in a prominent place and on the dispensing unit at their retail outlet shall be guilty of an offence and liable to a fine not exceeding level nine or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment," the regulations read.