×
NewsDay

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

Unlicensed fuel dealers flood local market

News
Unlicensed fuel dealers could be flooding the market bringing in fuel claiming that it was destined for the DRC or Zambia, thereby avoiding paying excise duty.

Unlicensed fuel dealers could be flooding the market bringing in fuel claiming that it was destined for the Democratic Republic of Congo or Zambia, thereby avoiding paying excise duty before offloading it onto the local market at sub-minimum prices, NewsDay has learnt.

BY RICHARD CHIDZA

It is understood that the fuel is coming into the country through Beitbridge and Forbes border posts.

This came to light after the Zimbabwe Energy Regulatory Authority (Zera) disclosed that there were several fuel retailers who were selling their diesel at almost the same price as in South Africa, raising suspicion as to how much they would have acquired their products.

It was established that several other backyard retailers in other parts of Harare and elsewhere were also selling fuel at below market prices. In South Africa, diesel averages R11,40 with petrol going for R13,36. However, retailers in Zimbabwe were selling the products at very high prices amid reports of massive corruption and importation scandals, including evasion of duties and other taxes.

Industry players who spoke to NewsDay on condition of anonymity claimed there were “rogue” importers bringing in fuel claiming it was destined for countries in the north, thereby avoiding paying duty before off-loading it onto the local market at sub-minimum prices.

Sources in the fuel industry said Beitbridge and Forbes border posts “leak like a sieve when it comes to petroleum products importation”.

“Zimbabwe’s centrality in the region is being abused by unscrupulous importers who bring in massive amounts of diesel and petrol evading paying of duties on the pretext that the petroleum products are destined for the DRC or Zambia before unloading them in the country’s retail market at very low prices,” a local market player said.

A survey by NewsDay showed that most fuel retailers in Harare were charging between $1,26 and $1,30 for a litre of diesel and $1,42 to $1,48 for petrol.

At least two retailers in Harare’s Msasa industrial area were selling diesel at a lowly $1,14 per litre and petrol at $1,35, about 10c less than the average price across the capital. Zera chief executive Gloria Magombo disclosed that one of the Msasa fuel retailers (name withheld) was not licensed to import or retail petroleum products.

“According to our licence register, (name withheld) is currently not licensed to import petroleum products. However, it submitted an application for a retail licence which is currently being reviewed,” Magombo said.

According to Magombo, the current average fuel price in Harare and its environs is $1,31 for diesel and is ranging from $1,23 to $1,36 while the average price for blended petrol was $1,48 with the $1,42 to $1,53 range.

“These prices are within acceptable range according to fuel pricing formulae,” she said.

“The variations are due to market forces and competition. The size of the fuel company, its infrastructure, location and other overheads also influence the retail price whilst operators have to be within the provisions of Statutory Instrument (SI) 80 of 2014 on fuel pricing.”

She urged motorists to “shop around” in order to maximise on competition in the sector.

Magombo added at least 95% of fuel in the country came through the pipeline “hence the quality is the same” while the regulator also conducted regular onsite fuel testing to ensure compliance with acceptable quality standards.

“Zera conducts fuel price compliance monitoring in order to ensure operators are adhering to provisions of SI80 of 2014. Zera also monitors the pricing trends on the international market and institutes appropriate measures,” Magombo said.

She said Zera would investigate claims that some importers were evading taxes.

“The law will take its course as such a practice, if proven, is a gross violation of importers’ license conditions. Such unscrupulous importers are also violating the fuel pricing regulations which require that all imported fuel should pay duty and other taxes top government,” she said, adding the Zimbabwe Revenue Authority would be best placed to comment on the tax evasion issue.

Energy minister Samuel Undenge could not be reached for comment.