Showdown over fuel import licences

News date: 17 May 2020Source:

A fresh dispute over the licensing of fuel importers has erupted with a group of local players allegedly sidelined by the Zimbabwe Energy Regulatory Authority (Zera) petitioning the government to review the process.

The Direct Fuel Imports (DFI) Group Zimbabwe said Zera’s licensing regime was shrouded in secrecy and promoted monopolistic tendencies in the fuel retail sector.

After four months of haggling over new regulations, Zera early this month granted import fuel licences to mostly major fuel companies.

This incensed the DFI Group whose members were excluded and are now pushing for the process to be reviewed.

DFI Group members say they were also abandoned by the Indigenous Petroleum Association of Zimbabwe (Ipaz), which negotiated on behalf of small fuel dealers, but “clandestinely” endorsed the contentious Zera regulations.

The petition directed to Energy and Power Development minister Fortune Chasi said the process used by Zera to license fuel importers was opaque.

“We write to register our concern and objection to the way the Zimbabwe Energy Regulatory Authority (Zera) is handling the licensing process for 2020 procurement licences,” said DFI Group in the petition gleaned by Standardbusiness.

“It came as a shock to 2019 procurement licence holders when Zera secretly announced in a communiqué to (Zimra) on 5th May 2020 an ‘Ivy League’ of secretly licensed procurement companies,” the DFI Group said.

The term Ivy League refers to a group of the most prestigious colleges in the United States.

Some of the top fuel companies that were given licences by Zera include Total Zimbabwe, Glow Petroleum, Ram Petroleum, Genesis Energy, Vivo Energy, Zuva Petrolelum, Sakunda Petroleum and Redan Petroleum.

Zera granted the licences after Ipaz, which was leading the negotiations on behalf of indigenous fuel dealers and had earlier approached the High Court over the issue, backed down from its position where they demanded a relaxation of tough new regulations that included $2 million fees per annum, owning 25 fuel stations and a performance bond of $30 million and proof of 10 million litres of past imports, among others.

Ipaz chairman Aaron Chinhara, through a communique to Zera, agreed to certain terms set by the regulator that included the $2 million licence fees and proof of 10 million litres past imports.

Ipaz and Zera also agreed to a reduced threshold for dealers to own 15 fuel stations instead of the original 25.