Fuel players challenge licence fees hike

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BY CHARLES LAITON

THE Indigenous Petroleum Association of Zimbabwe (Ipaz) has filed an urgent chamber application at the High Court seeking to interdict the Zimbabwe Energy Regulatory Authority (Zera) from effecting the 8 600% hike in licence renewal fees which was recently announced by government.

The fuel players said the hike in licence fees would now see them paying almost $2 million per year, up from just $23 000. Ipaz cited Energy minister Fortune Chasi as a co-respondent.

“This is an urgent application seeking to interdict the first respondent (Zera) from giving effect to the term of conditions for renewal of licences contained in a notice issued by the first respondent dated the March 9, 2020, the terms of which notice will take effect from March 31, 2020,” Ipaz said.

Ipaz further said it was also seeking another order to declare the Zera board as improperly constituted.

“The application also seeks to have the afore-said notice declared unlawful and, therefore, invalid. In addition, the application also seeks to have the first respondent’s board declared to be improperly constituted and as such, to have its decisions declared null and void.”

In his founding affidavit, Ipaz chairperson, Aaron Chinhara, said prior to the introduction of the multi-currency system in 2009, the petroleum industry was dominated by large multi-national companies such as Caltex, Mobil, BP Shell and Total, most of which have since deserted the industry which is now dominated by a few indigenous players.

Chinhara further said his organisation had 260 members, who were facing challenges due to a tough operating environment riddled by shortages of foreign currency and inflation which have brought the industry on its knees.

He also said when multi-national companies deserted the industry, they left a yawning gap, which then gave birth to his organisation.

Chinhara said his members had previously never had issues when it came to the renewal of licences until late last year.

“On March 9, 2020, the first respondent issued a bombshell when it published a notice headed: Petroleum Sector Notice: Licensing of Petroleum Sector Operators 2020. The contents of the notice confirmed our fears regarding the imposition of stringent requirements that we sought to stop notwithstanding the assurances we had been given by the first respondent.

“There would also be a shortage of fuel if 260 service stations with a capacity of millions of litres of fuel in the industry are forced out of business. Some of these members are holders of free funds that (can help alleviate) the acute shortage of fuel in the country.

“However, disqualifying them from obtaining a licence would mean that no such fuel is imported and the already crippling shortages would either continue to worsen.”

The application is pending.