HomeBusiness DigestOil barons take Zera boss to task

Oil barons take Zera boss to task


THE Zimbabwe Energy Regulatory Authority (Zera) has asked oil firms to continue using petroleum importation licences issued in 2019, while the two sides negotiate new licensing requirements.

To be granted authority to operate, oil companies are required to pay retail and fuel importation licence fees.

Zera and indigenous fuel companies have been fighting over importation licences since last year when the regulator announced a new regime compelling operators to demonstrate that they had previously imported at least 10 million litres. They are also required to have at least 15 refuelling stations.

But petroleum firms, represented by the Direct Fuel Import (DFI) group and the Indigenous Players Association of Zimbabwe (Ipaz), last year rejected the “outrageous” conditions and accused the regulator of promoting big foreign players.

The standoff sparked a High Court showdown. The High Court ruled in the operators’ favour, forcing Zera to roll over 2019 licences into 2020.

Businessdigest understands that Zera has authorised firms to roll over the 2019 licences again into this year.

“All the petroleum companies which were issued with 2019 procurement licences are still allowed to use the same licences in 2021 for their fuel importation operations,” Zera chief executive officer Addington Mazambani said in a March 3 letter seen by businessdigest.

“This position shall remain up until such a time that the authority prescribes new procurement licensing terms and conditions after consulting with various stakeholders,” he said.

According to sources who attended a meeting called by Zera last week, there were proposals that retail licence fees be pegged at US$24 360. There were also proposals that operators pay for three service stations by the end of next month.

However, the DFI group appeared to have reconsidered these issues.

“We have received the summary of the meeting from some of our colleagues from a sister organisation. For the record our position is as follows: We accept the Procurement Licence fee of US$24 360 for the year 2021. We reject paying for 2020 licences because your negligence in administering the whole exercise resulted in your failure to announce acceptable conditions to this very day. You cannot be rewarded for negligence. We also highlighted to you at our meeting in December 2020 that our members had incurred losses when you illegally suspended their licences for about a month in May 2020,” DFI said.

“We reject any requirement for service stations to be attached to procurement licences. Such attachment is a violation of the Petroleum Act. This Act clearly recognises the separate nature of the different licence categories. If sustained, this requirement will have the effect of amending/annulling an Act of Parliament.”

It said the mandate of Zera was to administer the laws of the country and not to amend them.

“We reject the requirement for past imports as this has the effect of inhibiting entry of competition into the sector. This is a naked violation of the Petroleum Act, which is self-explanatory. It is also a violation of other laws we have cited to you in previous correspondence,” the DFI group said.

“Our view is that any group of people that gets together to make agreements, while setting aside the pertinent laws of the country, is committing a grave act of corruption. We will not be party to this corruption. There is certainly nothing to ululate about and celebrate on this false agreement. Further, be advised that the laws regarding this issue have not changed since we secured a High Court judgment against yourselves over the same issue in May 2020.”

The DFI group condemned Zera for lack of proper consultation and planning.

“We write to register our grave concern regarding the (recent) meeting. Firstly the notice time for the meeting was too short, just 24 hours, although it was postponed by a day. We had requested you for this meeting in July 2020 and you were unable to respond until now. For this reason, we made all efforts to attend,” it said.

“At today’s meeting (March 17, 2021) all our members experienced connection problems of different kinds and upon reflection, it would seem this was a deliberate action to reduce our presence and effectiveness. We therefore refuse to be silenced by technical gremlins that seemed to be only interested in our members.”

Mazambani said the meeting was part of stakeholder consultations.

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