Zera culls fuel suppliers

ZIMBABWE Energy Regulatory Authority (Zera) has effectively shut the door on numerous companies that have been shipping fuel into the country after licensing a measly 34 companies from a record 130 entities that have been operating in the petroleum subsector.

Zera chief executive Addington Mazambani told journalists on Friday that as of Thursday, it had processed 34 licences ahead of the April 30, 2021 deadline.

In March, Zera announced a revised set of requirements for oil importing companies, which include US$24 320 per annum licence fee, proof of ownership of three retail sites and proof of fuel imports of a minimum of 10 million litres per annum from 2016-2019.

Licences are renewed annually.

Zera also announced that since the 2019 procurement licences were made valid in 2020, all companies which procured fuel in 2020 were required to pay $2 million exclusive of value-added tax by October 2021, failure of which licences would be cancelled.

Zera has been embroiled in a bitter legal wrangle with indigenous fuel entities after announcing stringent licensing requirements last year which small players viewed as intended to promote bigger players in the sector.

Consequently the High Court ordered that 2019 licences be rolled over to 2020. Since last year, the energy regulator has been engaged in stakeholder consultations on the requisite licensing requirements.

Petroleum firms, under the banner of Direct Fuel Import Group and the Indigenous Players Association of Zimbabwe, last year rejected the “outrageous” conditions announced by Zera and accused the regulator of promoting the interests of big foreign operators.

Zera hiked oil importation licensing fees to $2 million a year, from US$23 000 in 2019, requires proof of ownership of at least 15 fuel stations and a performance bond of $30 million. The licensing regime included production of proof that potential licence holders had previously imported at least 10 million litres of fuel, much to the chagrin of indigenous players.

Now, after a year-and-half battle, Zera has started issuing licences.

“As of yesterday (Thursday) we had received about 34 applications, which qualify to be issued with licences, and all the licences should be out by end of day today (Friday).We no longer issues physical licences, the system automatically emails the licence to the email address that would have been given during application. So those who qualify will have their licences today and today is the deadline.

“So, from tomorrow onwards those without licences will stop operations. But obviously there are cut off issues for those which had already ordered their fuel which is still in transit so we will have to cater for those,” Mazambani said

He said interest for the procurement of fuel had increased over the past decade, with figures showing that companies that were shipping fuel into the country grew from eight in 2012 to 130 as of 2019.-newsday.co.zw