Fuel firms to lose licences

Mystery surrounds the distribution of fuel in Zimbabwe after authorities have established that while enough money has been availed for players to procure the product, it has not been channelled to the market resulting in incessant countrywide shortages.

It has also emerged that for the month of June, the Reserve Bank of Zimbabwe (RBZ) released letters of credit for the acqusition of some 170 million litres against a national requirement of 140 million, raising serious questions about the leakages in the industry.

This came out after Energy and Power Development Minister Advocate Fortune Chasi and Reserve Bank of Zimbabwe Governor, Dr John Mangudya met fuel players in Harare yesterday and told them that new measures to curtail leakages in the fuel supply system will be instituted.

Among the measures will be the renewal of licences half yearly and cancellation of operating licences for those who flout procedure. Minister Chasi later appeared before the Parliamentary Committee on Energy and Power Development.

He said the measures were expected to instill discipline in industry players and plug leakages amid indications that the Reserve Bank of Zimbabwe has made provision to acquire 170 million litres of fuel for next month against a requirement of 130 million litres.

"I was in a meeting with players from the fuel industry and this is the second time that I am meeting them since I was appointed. The meeting was occasioned by the queues that we are seeing at the service stations throughout the country.

"The meeting was attended by the Reserve Bank Governor Dr John Mangudya and his staff and I made it very clear that licences are issued when the regulator is satisfied that it's in the national interest. And so when people begin to misbehave, as we understand from the public because I have been inundated by many complaints from the public, we act," he said.

Minister Chasi added, "Some say that when fuel is delivered, only a few people are served then they are told that fuel is finished when it's evidently clear that the fuel was there. There has also been instances where service stations refuse certain types of payments, insisting on US dollars.  

"This has occasioned untold suffering on the driving public and as Government we are there to protect the national interests. We are there to make sure that fuel is distributed rationally throughout the country."  

He said he made it very clear during the meeting that this strong element of dishonesty will not be tolerated by Government.

"We have agreed with the industry that all service stations will be wet today (yesterday). So we are expecting that there will be some movements, significant movement around the issue of availability of fuel.

"I also mentioned that I have just completed work on regulations around penalties for misbehaviour and those regulations will be sent to the Attorney General for examination and finalisation. We expect them to come into force pretty soon. We need order in this industry.

"I pointed that in order to enhance availability of information to the public, I will be publicising, who received what amount of fuel and when, so there is nowhere to hide.

"I also remind them that their licences will be due for renewal in six months. So when that time comes we will look at the conduct and behaviour of each player and it's our right as Government not to renew licences of entities run by devious people."

Minister Chasi also indicated that they had set up task forces to investigate misconduct by some service stations that are responsible for diverting fuel to the parallel market.

"We learnt that depots are also part of the cause of the problem, fuel is escaping through those depots and we are going to investigate on that," he told the Parly committee after he had been asked what he was doing to end fuel queues.

Dr Mangudya told the same committee that investigations were necessary since the country was procuring more than enough fuel every month.

"As of now we have letters of credit worth 170 million litres of fuel for the coming month against 130 million litres required by the nation for the same period," he said.

He assured the committee that the central bank will always avail funds to procure adequate fuel every month.  On fuel pricing, Minister Chasi said the industry pointed out that there was instability in terms of some of the templates that were being used to determine fuel prices.

"I have asked them to go and develop that position, giving us facts and figures. We are due to meet them the week after next, on Thursday so that we can develop the issue they have raised.

"The governor was able to demonstrate to the industry that people accessed money to bring in certain levels of fuel and that there is fuel. This why we are saying the queues must begin to move without delay," he said.

Minister Chasi said the Zimbabwe Energy Regulatory Authority (ZERA) last week announced the fuel price and it had not changed. Last week ZERA gazetted new maximum retail prices of fuel reflecting average increases of 46 percent for blend petrol and 49 percent for diesel.

ZERA said the new prices were premised on the interbank market rate and will see a litre of blend petrol (E10) retailing at $4,97 while diesel will sell at $4,89 per litre.

ZERA said the new prices were in line with measures taken by the RBZ on fuel procurement, now based on the ruling exchange rate on interbank market where oil marketers now obtain forex to import fuel.

The country has been facing intermittent fuel shortages as a result of a shortage of foreign currency and activities of dealers who are working in connivance with people in the fuel industry especially attendants who have been accused of diverting fuel to the black market.