Emerging Fuel Dealers Blame NOIC For Creating Shortages As Crisis Deepens

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By Mary Taruvinga

INDIGENOUS fuel dealers have complained they were being sidelined by the State-run National Oil Infrastructure Company of Zimbabwe (NOIC) in acquiring fuel on credit using the local currency.

As a result, they are forced to use hard currency to source the product and unfairly accused of indiscipline for selling the fuel at service stations in US dollars.

The Indigenous Petroleum Association of Zimbabwe (IPAZ) chairperson, Aron Chinhara told the Parliamentary Portfolio Committee on Energy this week that because of NOIC’s actions, they were forced to sell fuel in foreign currency to remain in business.

Chinhara said members from the association last accessed fuel through letters of credit (LCs) last March.

“We need more LCs because pipeline fees are high. We are not rogue elements at all. We are just like Chipinge people who are accused of witchcraft. If you are there, you will never meet a single person riding a hyena. We are just like that,” the owner of Glow Petroleum said.

Chinhara said IPAZ last received LCs worth 1, 5 million litres on March 14 while big fuel dealers received 140 million litres on the same day.

“A fraction of 1,5 million is nothing compared to 140 million litres. It won’t last even two days so what do we do? We buy in US dollars and the chain has to flow like that,” said Chinhara.

He said there was rampant favouritism in the fuel sector.

“National Oil Infrastructure Company of Zimbabwe only gives the big ones. I get less litres but my capacity is bigger than Engen which gets up to 25 million litres per month. I’m big in capacity to import and distribute,” he said.

The Reserve Bank of Zimbabwe (RBZ) governor John Mangudya told the same committee, it was possible that fuel retailers were hoarding fuel for speculative purposes or diverting the commodity to the black market or service stations that sell in foreign currency despite having accessed millions of litres from NOIC using the local currency.

“Out of $250 million LCs facility between $100 and $120 million is for the fuel industry. We do not deal with fuel companies directly they deal with their banks.

“Through NOIC 117 million litres were released in January while 106, 143 and 4 million was released from February to May, respectively. That is huge quantities and as the central bank, we are also troubled when we are told there is no fuel.

Mangudya said it seemed “like there is an invisible hand taking fuel without being noticed.”

“We always see fuel tankers carrying fuel presumably to various services but if you trail behind you will be told there is no fuel,” said Mangudya.

Zimbabwe Energy Regulatory Authority (ZERA) acting chief executive Eddington Mazambani said the authority was in the process of regulating the selling of fuel in foreign currency only.

He said selling fuel in foreign currency was not illegal at the moment, but the whole chain should be in foreign currency.

Zimbabwe is facing an acute shortage of fuel with motorists spending hours waiting in queues for the commodity.