Crack the whip on fuel crooks

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ONE of the unfortunate manifestations of Zimbabwe’s economic challenges is the proliferation of rent-seeking behaviour, unethical practices and downright greed in the business sector with players in various facets of the economy seemingly in a rat race to see who fleeces ordinary people the most.

While the Government implements reforms to put the economy on a growth trajectory, it appears it has to keep a hawk’s eye on errant businesses who are taking advantage of the shortage of essential commodities such as fuel to line their pockets. Austerity measures and economic reforms being spearheaded by the Ministry of Finance and Economic Development will take time to bear fruit and the current challenges Zimbabweans are going through are the birth pangs of a new economy whose major highlight will be an upper middle income status by 2030.

However, in the meantime, the country will naturally go through trying times as the economy adjusts to the prescriptions from Treasury and the monetary authorities. Shortages of fuel and other commodities are natural in a transitional phase given the scarcity of resources and debilitating sanctions impeding access to cheap lines of credit. Be that as it may, we appreciate that Government is doing all it can to provide for its citizens against a hostile external environment.

It is not a secret that there are competing needs for limited foreign currency reserves in the Government coffers. The Reserve Bank of Zimbabwe has to juggle between paying for electricity imports, critical raw materials for industry, medicines for the health sector, grain for the food security of the nation in the wake of a crippling drought and fuel which Zimbabweans are gobbling at an alarming rate on a weekly basis for non-productive purposes.

Despite being hamstrung by a paucity of resources, Government has always allocated funds for fuel with oil companies and retailers receiving their fair share of the commodity weekly. Figures from the National Oil Infrastructure Company (NOIC) indicate that in the past week, dealers accessed 35,7 million litres of both petrol and diesel.

On March 7, for instance, dealers got 6,2 million litres of diesel and petrol, which is 1,2 million litres above the daily demand of 5 million litres. In fact, fuel has been constantly flowing from NOIC but of late, the country has been in the throes of an artificial fuel shortage with motorists spending endless hours in queues amid reports of hoarding and diversion of fuel to the black market where it is sold in foreign                               currency.

When the problem started at the beginning of the month, the Zimbabwe Anti-Corruption Commission (ZACC) instituted investigations into reports of fuel hoarding by oil companies that allegedly received, that week alone, 20 million litres of diesel and almost 9 million litres of petrol, but reportedly withheld much of the fuel in the hope of forcing authorities to increase their permitted mark-ups. The oil firms allegedly withheld fuel received between February 24 and March 1 because they wanted higher mark-ups in the formulas used by the Zimbabwe Energy Regulatory Authority to set the retail prices. Zera subsequently increased the price of fuel with diesel retailing at a maximum of $18,66 per litre and petrol at $18,70, breaking the impasse.

However, for the past two weeks, both diesel and petrol have been in short supply, crippling operations in industry and incapacitating the public transport sector. This points to either sabotage, hoarding of fuel or its diversion to the parallel market. With rates between the Zimbabwe dollar and United States dollar surging on the black market in the past week and peaking at around USD1: ZWL40, the temptation for fuel retailers to cash in cannot be ruled out.

There are reports that some fuel retailers not licensed to sell in foreign currency are clandestinely doing so after receiving supplies from NOIC, creating artificial shortages on the market. This is scandalous and should be stopped forthwith. In this regard, we are glad that Government has activated high level systems to deal with corrupt fuel retailers that have engineered artificial shortages with strict surveillance mechanisms and a cocktail of punitive measures to clean up the sector. As we report elsewhere on these pages, the stakes were high on Friday as heads of key State departments met in Harare to draw up penalties against unscrupulous fuel dealers.

NOIC chairman Engineer McKenzie Ncube said the meeting drew top officials from his office, Office of the President and Cabinet, Zimbabwe Revenue Authority (Zimra), Zimbabwe Republic Police, Ministry of Energy and Power Development, Zera and the Special Anti-Corruption Unit in the Office of the President and Cabinet (Sacu).

Eng Ncube said the quickest way of arresting the malpractice was to introduce stiff penalties against those caught on the wrong side of the law. We agree.

Aside from the penalties, Government is set to introduce electronic fuel monitoring devices that will be rolled out by Zera at service stations and on trucks. Energy and Power Development Minister Advocate Fortune Chasi said the fuel regulator was working on the project which is bankrolled by Government to the tune of US$300 000.

The system, which is being incubated by the Harare Institute of Technology (HIT), is expected to eliminate hoarding of fuel by retailers.

When fully functional, all haulage trucks transporting fuel will be fitted with trackers and volume-measurement technology to enable geo-fencing and monitoring of the vehicles’ movements.

Government is also demanding fuel reconciliations of petrol and diesel collected from NOIC versus that sold to consumers. We welcome the measures being instituted by Government to arrest fuel shortages and curb leakages along the supply chain. Clearly the problem lies at the dealership end where fuel is being diverted to the black market.