Govt abandons measures to combat fuel fraud

May 13, 2021

PHILLIMON MHLANGA

The Zimbabwe Energy Regulatory Authority (ZERA) has abandoned the fuel marking programme which was meant to help combat fuel fraud, which is prejudicing government billions of United States dollars annually in unpaid taxes, Business Times can report.

Fuel marking was going to be done by an independent organisation at the point of entry or when loading at a bulk depot.

Zimbabwe has been facing fuel supply problems such as smuggling, adulteration and dilution all of which deprive the government of tax revenue.

Fuel marking was going to deal with fuel fraud.

ZERA chief executive officer Eddington Mazambani confirmed that the programme was abandoned.

“The proposed fuel marking project has been dropped. We thought we could adequately deal with the issues to do with smuggling, dilution through what ZIMRA is doing,” Mazambani told Business Times.

Three years ago, ZERA tendered to select firms to implement the project. Several international companies including SICPA SA of Switzerland and Authentix of the United States of America submitted bids to provide fuel marking services.

The fuel marking concept was going to involve the introduction of a bio-chemical liquid (fuel marker) into the petroleum products at the loading depots prior to delivery to retail outlets.

This means that any level of dilution was going to be quickly detected and proper enforcement procedures were going to be initiated.

Some players in the fuel sector have been mixing diesel with paraffin or Jet A1, products which are imported duty free, resulting in sub-standard fuel and loss of revenue to the government. 

To stamp out this malpractice, the government resolved to fuel marking in order to identify offenders and punish them accordingly.

ZERA was supposed to work with the Zimbabwe National Roads Administration and the Zimbabwe Revenue Authority to enable it to monitor the quality of petroleum products, as well as recover fiscal tax revenue from the sale of these products.

Fuel marking was supposed to maximise revenue collection by minimising dumping of duty-free export or transit fuel in this market, smuggling and adulteration of dutiable fuel with non-dutiable fuel.

A lot of money and property was going to be saved by ensuring that the general public was not buying substandard fuel that damages their assets.

It was going to form a solid base for gathering accurate fuel importation and consumption statistics and protect genuine oil industry players by putting in place an enabling fuel quality monitoring and enforcement mechanism that weeds out undesirable elements.

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