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Relief for small fuel importers

by Staff reporter
29 May 2020 at 07:41hrs | Views
Small fuel companies are now allowed to import fuel after the High Court on Wednesday overturned the decision by the Zimbabwe Energy Regulatory Authority (Zera) to issue import licences to only eight major fuel companies.

The small companies each have less than 15 service stations and the main reason why they were excluded was that their fuel was unlikely to have major impact on national supplies.

Zera allowed Total Zimbabwe, Glow Petroleum, Ram Petroleum, Genesis Energy, Vivo Energy, Zuva Petroleum, Sakunda Petroleum and Redan Petroleum to import fuel directly, but instructed the Zimbabwe Revenue Authority (Zimra) to bar any other fuel imports.

Aggrieved by the Zera directive, Direct Fuel Imports (DFI) Group Zimbabwe and Indigenous Petroleum Association of Zimbabwe (IPAZ), approached the High Court suing Zera and Energy and Power Development Minister Fortune Chasi over the licensing of fuel importers. They sought to suspend the Zera notice and review of the licensing process, which they argued was veiled in secrecy and promoted monopolistic tendencies in the fuel retail sector.

Justice Tawanda Chitapi granted the DFI Group and IPAZ a provisional order allowing them to bring in their consignments pending the finalisation of the matter. The members of the two groups can now temporarily use their 2019 licences to bring in fuel. The judge said the full reasons for the judgment will be availed in due course.

Early this year, Zera issued fuel import licences to major fuel companies, which incensed the DFI Group whose members were left out. Through its lawyer, Mr Frank Nyangani, the DFI Group's contention was that the proposed licensing requirements were discriminatory against smaller indigenous players in the petroleum sector, which had potential to create a dangerous monopoly in the industry contrary to Zera's mandate of promoting "effective competition between persons engaged in the petroleum industry".

Zera, which was being represented by Sawyer and Mkushi law firm, argued that the fuel dealers excluded in this case had failed to meet the set requirements, especially the need to have at least 15 retail service stations. The requirement came due to growing applications for import licences when they did not have retail sites or retail licences. There were fears that smaller companies were feeding the black market.

Minister Chasi, who was represented by the civil division in the Attorney-General's Office, submitted that Government wanted to bring order to the sector, which has failed to satisfy the demand for fuel.

Source - the herald

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