Mines and Energy parliamentary portfolio committee chairperson Edward Chindori-Chininga said: “The private players are locked in an ownership wrangle with Noczim on who owns the buffer stock. They are seeking government’s intervention in determining the owner after alleging Noczim is diverting private fuel in the line to its own service stations.”
Chindori-Chininga said this when he presented the committee’s response to Finance minister Tendai Biti’s proposal to introduce a new levy to compel private players to use the pipeline. In the 2011 national budget, Biti proposed to levy private players US$0,04c per litre to induce them to use the pipeline as opposed to road transport.
Chindori-Chininga said his committee feared that such a levy would spur a new wave of increases in petroleum products as private players would pass on the burden of the levy to the consumer.
“Whilst this may be a noble idea, the committee believes government should have first tried to build and give assurance to players in the petroleum sector that they would not be a fuel diversion. Failure to do that might lead to price increases of fuel, especially by companies using the road sector,” Chindori-Chininga said. “Noczim is struggling to pay additional cost of dead stock and buffer stock on the pipeline – this is a matter that must be addressed and the petroleum players have indicated to the committee that they are willing to discuss with Noczim and find ways to meet the cost.”
The committee further argued that petroleum was currently levied by other charges and an increase in the cost of importation would hurt economic recovery as fuel is a major factor to economic stimulation.
Chindori-Chininga’s committee recommended that government should “work out a mechanism that ensures costs are shared between all the users of the pipeline”.
Meanwhile, the dispute could be resolved quickly after the House of Assembly passed the Energy Regulatory Amendment Bill.
The Bill seeks to split Noczim into two entities, one regulatory and the other solely for oil procurement and distribution.
Noczim used to enjoy the dual role of being a regulator and fuel distributor and retailer at the same time. This gave it an inordinate advantage over private players who would also pay it for using the Harare-Feruka-Beira pipeline.
Goromonzi North MP and businessman Paddy Zhanda said the development was welcome considering that government’s role has to be clear on business as it should not compete against private players.
“Governments should only play a facilitation and regulatory role in industry and commerce. Noczim had no business to retail petroleum products. The country was never short of service stations but needed more fuel to be imported,” Zhanda said.