'End Zimdollar fuel fraud'

Government has roped in the National Oil and Infrastructure Company (NOIC) to monitor the distribution of fuel imported under the Reserve Bank's foreign currency allocation facility to ensure oil firms sell in local currency and do not profiteer.

This comes amid reports of widespread fraud in fuel procurement with beneficiaries under RBZ's foreign currency auction system reported to be illegally selling fuel in US dollars to maximise profits.

Finance and Economic Development Minister Professor Mthuli Ncube this week said the intervention was expected to go a long way in curbing rent seeking behaviour where some oil companies were accessing cheap hard currency from the central bank only to sell it exclusively in foreign currency.

The continued sale of fuel by oil companies and service stations exclusively in foreign currency, said Prof Ncube, was not only depriving the public of fuel in local currency but was stifling the fiscus in earning taxes. Prof Ncube said this in Senate on Thursday while responding to questions from Senators.

Midlands Senator, Morgan Komichi had asked what Government was doing to deal with errant service station owners who continued to sell fuel in foreign currency after accessing hard currency from the central bank's weekly auction system.

"It is certainly true that if you go to most of the service stations, there are more of them that are selling fuel in United States dollars and not in Zimbabwean dollars as they would have promised us.

"Some of these fuel operators would come to the auction to source United States dollars to purchase fuel. They are successful in doing so but they go on to pay for this fuel but the condition is that they should sell in Zimbabwean dollar.

"They do not comply and proceed to sell in foreign currency. They also go further and pay excise duty in Zimbabwean dollars which ought to be paid in United States dollars so there are two offences here - depriving the public of Zimbabwean dollar fuel and then depriving the fiscus and the public of taxes," said Prof Ncube.

"That is an issue we are dealing with and we have decided to really narrow the space and put in a facility through NOIC so that it is part of the architecture of accessing the fuel in the first place, making sure that it is available in Zimbabwean dollars.  "It is our expectation that this will improve the availability in local currency. The moment you have these kinds of shenanigans, you also now have interplay between the fuel market and the parallel market which feed into each other."

Prof Ncube said they were working hard to tighten screws on people looking for arbitrage gaps to ensure the public was better treated by fuel companies.

Senators also expressed concern over delays by Treasury to consider application letters from importers requiring rebates on imported material for capital projects which would have been approved by line Ministries.

The said delays had also seen importers incurring storage charges from the Zimbabwe Revenue Authority.

Prof Ncube admitted that there were delays, but said he had come up with a five day cap within which the letters should have been acted upon given that the rebate policy on equipment was driving investment and bolstering production.

"The policy of rebates for imported equipment for investment purposes is a very good one. It explains why our industrial sector has remained robust and progressive even in the face of some economic challenges we have experienced in the past.

"It is a policy that we want to see continue and it is certainly true that there has been some bureaucratic delays and I have received complaints personally," he said.

"We are putting in a policy that we should be able to clear any request like that within a period of five days. We have no reason to delay further than five days because we do this for a living.

"We know what qualifies and what does not so we have a five-day rule now for turnaround of any such queries at request."