Petrol consumption falls 11.2% in H1 as Govt plans to curb transit fraud

HARARE – Fuel consumption is expected to maintain an upward trend for the remainder of the year following measures put in place by the Treasury to curb transit fraud and under-declared petroleum products. Fuel consumption has been on a decline since last year. This is despite the growing vehicle population and the increase in the number of fuel stations, which according to the mid-year budget review, are up 88% for the ten-year period beginning 2014.

The last reported petroleum product consumption figures showed a decline in both diesel and petrol usage (Fuel consumption declines in Q1 but there could be distortions). Treasury put forward plans to address transit fraud, which had resulted in lower fuel consumption figures. With effect from August 1, 2024, government imposed a payment of duty at the Port of Entry for fuel imported under the Removal in Transit Facility. This means that duties and levies will be collected upfront.

The duties and levies collected at the Port of Entry will be recovered on acquittal at the Port of Exit, ensuring that the government can track and collect the necessary taxes on goods that are supposed to be in transit. Treasury also stated that there will also be mandatory fiscalisation of domestic fuel sales, with effect from 1 November 2024.

In addition, the government previously introduced the ECTS, which uses electronic seals and transmitters to monitor cargo, particularly fuel. However, due to ongoing issues with transit fraud, the government reinforced the need for this system to ensure compliance.

According to the latest statistics from ZERA, petrol consumption was 11.20% lower to 271.76 million litres. June petrol consumption at 36.96 million litres was the lowest in just over 30 months. In May, petrol consumption was at 51 million litres, resultantly declining 27.52% in June.

Diesel consumption increased 3.7% in the six months to 529 million litres from 510.22 million in the same period last year. In June, diesel consumption was 2.39% higher to 93.58 million litres from 91.4 million in May. The country saw increased activity in the infrastructure space due to SADC summit preparations and in agriculture, winter cropping. There was also increased load shedding during the period, which forced the use of alternative power.

Paraffin, which is mostly used for household cooking and lighting, used a total of 806,000 litres. Jet A1, the aviation fuel, amounted to 46.83 million litres. Finally, liquefied petroleum gas (LPG), a cleaner alternative to traditional cooking fuels, consumed 33.58 million llitres.-finx