Supply Chain Council of European Union | Scceu.org
Procurement

ZERA Buckles Over Fuel Procurement Licence Fees

By A Correspondent- Zera has buckled under pressure from indigenous petroleum companies and withdrawn an earlier announcement of a hike in fuel procurement licences by 8 600%.

After a two-month wait, Zera announced last week that fuel licences for 2020 were now $2 million per annum and further out a $30 million performance bond as a licensing requirement. Fuel dealer’s licences, whose lifespan is one year, expired on December 31 2019.

In a circular to the petroleum sector gleaned by this publication, the Zimbabwe Energy Regulatory Authority (Zera) said fuel retailing licences for urban and rural operators had been increased to $10 000 and $4 000 respectively.

The wholesale licence fee was pegged at $122 400 whereas the fuel blending licence was put at $76 500.

Production licence for biodiesel was pegged at $306 000.

“A procurement licensee shall have a supply contract from a trader at the time of application for a licence. A procurement licensee shall have/own at least 25 sites and should provide evidence of such ownership. A procurement licensee should provide a performance bond with a value of ZWL$30 million before licensing,” read some of the requirements from Zera.

The hike in procurement licence fees has alarmed indigenous fuel players who see the increase in fees as an attempt to muscle out small fuel dealers and the creation of a monopoly in the sector.

Zera acting chief executive Eddington Mazambani did not respond to questions sent via email and WhatsApp.

Numerous efforts to call him yielded no result.

Zera recently allowed fuel companies to sell fuel in foreign currency, restricting them to two service stations per dealer in urban centres in yet another clear sign that the economy is redollarising.

The central bank yesterday issued a statement saying it has availed to oil companies fuel finance facilities valued at US$25,24 million for the week ending March 15, 2020.

In recent weeks fuel has remained elusive on the market with desperate motorists spending hours in long-winding queues countrywide.

Diesel is currently trading at $18,66 with petrol selling at $18,76 on the local market.

Mushrooming unregistered fuel dealers have taken advantage of the fuel crisis to sell the product on the parallel market in hard currency. As the fuel crisis deepens, motorists are forced to buy fuel sold in forex as it is always available.

Zimbabwe has six major oil-importing entities which include the Indigenous Petroleum Association of Zimbabwe Ipaz, Zuva Petroleum, Puma Energy, Total Zimbabwe, PetroTrade (Pvt) Ltd and Engen Petroleum Zimbabwe.

Sakunda and Redan were some of the key members of Ipaz until they were taken over by Singaporean-based Trafigura group, one of the world’s leading commodity companies, which trades under Puma Energy and Trek in the country.

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