August diesel volumes rise 29% after new rules to curb transit fraud
HARARE – Diesel consumption experienced minimal change in the eight months ending August 31, 2024, with a slight increase of 0.16%. However, August marked a notable rise in consumption, attributed to enhanced accountability under new duty regulations, the growing need for alternative power due to frequent power outages, and, to a lesser extent, increased economic activity leading up to the SADC summit.
According to data from ZERA, the energy regulator, diesel consumption rose by 0.17%, reaching 704.32 million litres compared to 703.15 million litres during the same period last year. In August alone, diesel volumes surged by 28.99%, climbing to 98.76 million litres from 76.56 million litres in July. This August total represents the highest monthly volume recorded this year and the highest in 11 months, while July’s figures were the lowest since February.
Frequent power outages have led to a higher reliance on diesel-powered generators, increasing demand for diesel as an alternative power source. Companies like Simbisa Brands, Econet Wireless and formal retailers are going for 16 hours on generators due to load shedding.
In the mid-term budget statement, Finance Minister Mthuli Ncube addressed fuel transit fraud, which had contributed to lower consumption figures throughout the year, despite an increase in the vehicle population and the emergence of new fuel service stations across the country. He mandated the payment of fuel duty at the port of entry and emphasised compliance with the electronic cargo tracking system and the mandatory fiscalisation of domestic fuel sales, effective November 1, 2024.
According to a ZIMRA public notice, the new duty system went into effect on August 10, 2024, while the midterm Finance Bill is still awaiting presidential approval after the Senate reinstated the fuel duty clause that the National Assembly had removed. Duties and levies will be refunded at the port of exit upon adherence to all transit procedures, including proof of fuel exportation. Although there was significant concern regarding the additional regulatory burdens and increased business costs, the August figures provide the government with encouraging feedback.
Petrol consumption also saw a slight improvement in August, rising by 2.99% to 47.5 million litres from 46.12 million litres in July, marking a two-month recovery following a decline in June. However, for the eight-month period, petrol volumes decreased by 9.43%, falling to 365.38 million litres from 403.41 million litres last year.
LPG consumption increased by 7.4% in the eight months ending August 2024 compared to the same period in 2023, rising from 44.29 million kg to 47.41 million kg, as more households show a growing preference for LPG as a cooking fuel. Additionally, Jet A1 volumes rose by 16.95% to 61.7 million litres, reflecting increased air activity into the country.-fnx
