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Chamisa's MP approaches court over mandatory fuel blending

by Staff reporter
10 Jul 2020 at 07:18hrs | Views
HARARE North member of the National Assembly and businessman Allan Markham has approached the High Court for an order to set aside regulations for the mandatory blending of anhydrous ethanol with unleaded petrol.

Markham is challenging the legality and constitutionality of the regulations which made blending of petrol mandatory, resulting in Billy Rautenbach's Green Fuel being the sole supplier of the ethanol.

The application comes at a time the country's cost of fuel, although blended with 20% ethanol, has become the most expensive in the southern African region as a result of the high cost of Green Fuel's ethanol.

"This is an application I bring before this honourable court for a declaratory order that seeks to set aside the Petroleum (Mandatory Blending of Anhydrous Ethanol with Unleaded Petrol) Regulations that were published in Statutory Instrument 17/2013," Markham's application reads.

Zimbabwe has been grappling with fuel shortages since 2017, with no solution in sight.

In his application, Markham who is being represented by Mafume Law Chambers, Energy and Power Development minister Fortune Chasi is cited as the first respondent in the matter while the Zimbabwe Energy Regulatory Authority (Zera), Green Fuel and Tongaat Hullet Limited are the second, third and fourth respondents respectively.

"It is my contention that the regulations in question are illegal and nullity on the basis of the following: (i) that the regulations issued are ultra vires the provisions of the Petroleum Act Chapter 13:22; (ii) the regulations are in any event, an unlawful usurpation of power by the 1st respondent (Chasi) in breach of Section 134 of the Constitution of Zimbabwe," the application reads.

"That the regulations create demand-side and supply-side monopoly and are therefore an infringement of the Competition Act Chapter 14:28; and (iv) that the regulations in any event, are an infringement to my right to equal protection and benefit of the law as protected by Section 56(1) of the Constitution of Zimbabwe."

According to Markham, Zimbabwe spends more than US$1,6 billion on fuel annually. Of this, Zimbabwe consumes diesel worth about US$1 billion a year and US$600 million in respect of petrol.

He said government hurried to implement a law without ascertaining the impact of switching to blended fuel.

"For starters, there has been no independent body to verify the safety of the ethanol on vehicles. As I will show below, a blanket use of ethanol without thorough testing and checking the suitability of the same on every vehicle is wrong and unfair.

I am aware of cars that are being damaged by that ethanol.

There is no explanation for this accelerated movement and, in the absence of such, the inescapable conclusion is that the whole motive is that of profit and greed.

"There is also further prejudice in the pricing of this anhydrous ethanol-blended fuel. Whereas the international price of the anhydrous ethanol is generally US$0,60 the third respondent is selling its fuel for US$1,30 per litre. I go into some detail on this later on below the third respondent (Green Fuel) is thus abusing its captive monopoly position to basically dictate an unreasonable price."

Government introduced the legislation in 2013 which, among other objectives, sought to establish the mandatory blending of all petrol to be sold in Zimbabwe with 5% anhydrous ethanol fuel. The blending ratio has now been increased to 20%.

"In addition, a whole range of monopolistic and restrictive provisions were then set out. I reproduce herein Section 4 of the regulations: "4(1) no procurement licencee or wholesale licencee shall sell unleaded petrol, unless the unleaded petrol has been blended with a minimum of five per centum (5%) locally produced anhydrous ethanol, being ethanol blend grade E5, which is produced by a licenced ethanol blender. "I am a driver who owns several petrol vehicles. I feel greatly aggrieved by the actions of the respondents. I feel that the actions greatly affect my freedom of choice, bring danger to my economic welfare and are not in the best interests of this country."

Markham also argued that the Energy minister and Zera had no authority to make any regulations governing anhydrous ethanol.

"The regulations are thus a nullity and should be set aside. The regulations that can be made by first respondent as with all regulations can only be those of a mundane and routine nature pertaining to the availability, sale and distribution of fuel in

"Moreover Section 4(1)(e) makes it clear that one of the functions of the first respondent is to promote effective competition between players in the petroleum industry. The regulations certainly do not do that. They therefore further infringe on the Act itself and should be struck out," he said.

The businessman argued that consumers and licenced fuel procurers were being prejudiced as they do not have the option to source ethanol from cheaper sources.

In his opposing affidavit, Chasi asked the court to dismiss the matter, as there was a similar case that was brought by Thabani Mpofu in 2013. The judgment of the matter has, however, not been passed.

Source - the independent