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Herald Reporter
Foreign currency service stations will be limited to two in each province, with oil companies allowed to hold no more than two licences, each in a different province, and competitive bidding will kick in if more than two companies want the two stations in any province, under regulations gazetted yesterday.
Foreign currency fuel will be marked, probably by a special dye, to stop ordinary fuel being sold for foreign currency or for legal forex fuel being diluted with ordinary fuel.
Service stations selling in foreign currency will be compelled to bank all that currency into a suitable account approved by the Reserve Bank of Zimbabwe. This will prevent owners of these stations keeping foreign currency in cash. Non-oil bills will have to be paid in Zimdollars, preventing the forex stations from being a start of redollarisation.
Swinging penalties for cheating are set with fines and civil penalties varying, but the accompanying jail terms almost always set at five years in the long awaited Petroleum (Direct Fuel Imports and Marketing of Fuel) Regulations 2020 issued yesterday by Energy and Power Development Minister Fortune Chasi, after consultation with the Zimbabwe Energy Regulatory Authority.
Only the larger holders of procurement licences, the oil companies, can even start applying for their maximum of two forex service stations.
An oil company has to own at least 25 retail licences before applying and then has to satisfy the Petroleum Regulatory Authority, which licences all oil companies and service stations, that all petrol and diesel sold at the service station will be procured using free funds or legally held foreign currency they have earned.
The several requirements and limits set mean that a maximum of 20 service stations can be converted nationally to forex stations and even the smallest qualifying oil company will be able to convert no more than two of its 25 stations, so must keep 92 percent of its business in Zimdollar stations with larger companies keeping a higher percentage as ordinary Zimdollar stations.
Thus the overwhelming bulk of service stations are to be retained as ordinary Zimdollar stations with the forex stations just being a tiny percentage. The set maximum of two forex stations in each of the 10 provinces, and every oil company having their two stations in different provinces, has an extra limitation.
No oil company can apply for or hold a forex station licence in both Harare and Bulawayo.
The Petroleum Regulatory Authority can also stop bunching of the two forex stations in each province by requiring an applicant to nominate an oil station for conversion.
A detailed swathe of clauses in the regulations deals with the marking of forex fuel.
No details of the marking chemicals are given, but in most countries, a dye is used or is part of the cocktail of chemicals used to mark fuel.
Once the Petroleum Regulator Authority decides to mark fuel, a suitable concern will be appointed to mark all fuel, everyone else will be banned from holding the marking formula; inspectors will be appointed who can, on demand, take a small sample from tanks or tankers to ensure that the fuel being sold for forex was properly procured and that it has not been diluted with ordinary Zimdollar fuel.
Buyers of fuel at the forex service stations will be limited to 200 litres in each transaction unless they can persuade the service station owner that they have a legitimate need for the extra and will not be reselling what they buy.
Even then the service station will have to record personal identity particulars of the buyer and the reasons for the purchase above 200 litres. The regulations also criminalise any sale of fuel in forex outside the 20 stations.
Any sale means anyone from an oil company selling tanker loads, through Zimdollar service stations selling in forex, as some now try and do in shortages, to the person wandering down a queue with a jerrycan of black market fuel.
Penalties, as with all cheating in the regulations, include fines of up to $120 000, five years jail, and civil penalties similar to those the Reserve Bank can issue for forex cheats.
The fuel being sold illegally will be confiscated.
In some cases, directors of a company whose officials are cheating can be jailed for six months, an incentive for boards of directors to take their oversight responsibilities seriously.
Zera will set the maximum forex retail prices using a formula very similar to the formula set for Zimdollar prices.
Finance and Economic Development Minister Mthuli Ncube cut the duty on forex fuel yesterday in another gazetted notice from 45c US a litre to 25c US a litre for petrol and from 40c US a litre to 20c US a litre for diesel and kerosene.
Companies applying for licences will have to pay US$20 000 just to apply for a forex procurement licence, plus the same each year if they are successful, and then US$1 500 for each urban retail service station and US$1 000 for each rural service station in both application and annual fees.
If more than two companies bid for the licences in a single province, as is almost certain in Harare and Bulawayo at least and likely in several other provinces, the Petroleum Regulatory Authority will call for sealed bids where the competing companies will give the multiple of the annual fee they are prepared to pay and the top two getting the licences in a straight forward corruption-fee method.
Online Reporter