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The regulations allowing the licensing of a limited number of service stations, 20 across the whole of Zimbabwe, to procure fuel in foreign currency and sell it in US dollars set up a carefully thought-out method of mopping up free funds from those who want instant access to fuel, but avoiding even the slightest taste of redollarisation or fuelling the black market.
A large part of the regulations goes into a lot of detail and depth on the methods the authorities are taking to ensure that the 20 service stations will buy all their fuel with genuine free funds or with legally held and earned foreign currency.
That definition alone bars the use of cash bought on the black market.
In addition, the regulations make it clear that foreign exchange bought on the interbank market or allocated under the special block transfers by the Reserve Bank of Zimbabwe cannot be used to buy fuel for forex service stations.
This is how the general imports for service stations selling in Zimbabwe dollars are funded.
The regulations also make it clear that the authorities are determined that general fuel imported cannot be sold for foreign currency and cannot be mixed with fuel being sold for foreign currency.
The direct fuel imports will be marked.
Obviously, the authorities are not going to go into detail on the marking, since they do not want this reproduced by criminal elements in the motor trade, but in most countries where there is a need to distinguish different types of fuel a cocktail of chemicals is used that usually includes a dye, to show the general public that it is marked.
Faking or even possessing the marking cocktail have been defined as serious offences, and the company chosen to do the marking will have to accept tough security conditions.
The 20 service stations will be monitored and both they, and the tankers that supply them, will be continually inspected to ensure that the fuel being sold for foreign exchange is only the fuel bought for foreign exchange under the licensing arrangement.
Enthusiasm to stop the 20 garages from becoming centres of foreign exchange dealings outside the banking system also takes up several clauses of the Petroleum (Direct Fuel Imports and Marking of Fuel) Regulations.
For a start, they have to bank all their foreign exchange takings, which means managers will not be able to use their back pockets to keep cash.
The foreign exchange taken on the forecourt goes into an approved bank account and will be subject to the normal rules of the Reserve Bank of Zimbabwe.
Presumably, the working capital, the money needed to import the next batch of fuel and pay the forex taxes, will be released under normal checks that centre on production of invoices.
The remainder, the profit, will no doubt be treated in the same way as the profits of most exporters.
This is one of the ways that free funds wandering around the Zimbabwean economy will be brought into the formal banking system.
The forex services stations are being licensed to import and sell fuel in foreign currency. All other transactions are in Zimbabwe dollars.
That means rent, rates and the like, plus salaries and other staff costs, have to be paid in local currency.
It also means that if one of these service stations wants to sell sweets and tyres from a kiosk, those have to be sold in Zimbabwe dollars.
Only fuel sales are treated differently.
The regulations also create a number of specific offences arising from breaches and cheating.
Each of these has been carefully defined, so almost all are simple to prove, or disprove.
A prosecutor can present easily obtained evidence to have the guilty convicted. The offences do not really lend themselves to complex defences.
The general penalty is a fine of varying size plus “imprisonment for period not exceeding five years”, one of the more common phrases in the regulations.
But for everything to work, the authorities will have to enforce the rules and prosecute those for whom the simple evidence shows are guilty.
The rule that there will only be two forex stations in each province will, as a side effect, expose the growing environmental and other problems caused by the urban area of greater Harare expanding beyond the limits of the metropolitan province.
It is likely that the licence applications for Mashonaland West, Mashonaland Central and Mashonaland East could well be concentrated in Norton, Christon Bank, Mazowe, Domboshava, Ruwa and Beatrice and the roads leading to those towns.
Even Zvimba and Melfort might prove attractive.
Technically, these licences are for a non-metropolitan province, but in practice applicants obviously expect their customers to come from Harare.
The Zimbabwe Energy Regulatory Authority has its work cut out untangling this problem, one that exists in other areas and is a small indication of the need to modify provincial and district boundaries as circumstances change.
Online Reporter