eBusiness Weekly
Golden Sibanda
FUEL dealers may soon be required to direct only 10 percent of their allocated amounts to the commercial sector and the bulk to general market consumers, as the Zimbabwe Energy Regulatory Authority (ZERA) attempts to tighten screws to stem out suspected diversion of the commodity.
The chronic shortage of fuel in Zimbabwe manifests through common sights of long winding queues at service stations across the country despite the countless pledges by authorities to deal with the challenge decisively.
But despite the selling of fuel on the blackmarket being blatantly clear and happening every day in broad daylight, ZERA admitted it remained unclear how the commodity is being funneled away from registered dealers into the hands of roadside traders.
Part of further stringent measures by the regulator to curtail market indiscipline such as diversion of fuel to the black market, which has resulted in widespread acute shortages across the country, also entail limiting sales to 600 litres per buyer or motorist on the forecourt.
ZERA acting chief executive Edington Mazambani said they had noted that the majority of fuel dealers were directing a significant amount of their allocations to the commercial sector, at the expense of the general market buyers, resulting in the shortages.
Zimbabwe has faced fuel shortages for nearly two years now, against the backdrop of limited foreign currency for imports, spawning a thriving US dollar parallel market that has led to diversion of the commodity from the formal market where it was mostly sold in local currency at low prices.
Ironically, fuel shortages persist despite the Reserve Bank of Zimbabwe recently claiming to be availing foreign currency, an average of US$100 million every month, for fuel imports enough to meet domestic demand.
Mazambani said there were a few incidents when the energy industry regulator has caught service stations indulging in black market operations, prompting ZERA to further tighten the framework for accountability by licensed fuel dealers.
“We have since requested that they (Dealers) give us weekly returns instead of monthly returns and we have indicated to them that of their allocation about 10 percent should then go to the commercial sector, but it’s something we are working on with other arms of Government,” Mazambani said in an interview.
Some of the cases, Mazambani said, were investigated with the help of the Zimbabwe Republic Police, while in other instances the offences were tried at the country’s courts of law, but reservations abound that the resultant penalties are not stiff enough to discourage this criminality.
He said investigations were still underway to understand exactly how fuel is lost, but he noted that preliminary findings also showed some of the leakages happened right at the forecourts, allowing culprits to account fully for allocations.
“But we hope once we have gotten to the bottom of the issue we shall begin to see all the fuel coming through the formal channels. It’s not yet quite clear how we are losing fuel, but are still trying to pursue any possible avenues for leakages,” he said, adding that panic buying and under supply had also been factors causing fuel shortages in the market.
Mazambani, however, said supplies had seemingly improved since the Reserve Bank of Zimbabwe started publishing facilities for fuel imports last month to deal with issues arising from information asymmetry.
But he pointed out that possible panic buying in anticipation of continued shortage of the commodity may still be contributing to prevailing hiccups on consistent and adequate availability, as most motorists seek to always be stocked up.
ZERA this week also admitted that penalties for those caught violating the law were simply not deterrent enough, possibly becoming a factor in either failure to curtail such misconduct by licensed dealers that have previously been punished or just discouraging such malpractice among other players in the industry.
Zimbabwe spends nearly US$1, 5 billion on fuel imports each year, but the Southern African country has failed to put an end to shortages of the precious commodity despite its economy performing at way sub-optimal levels for close to two decades now.
