Fuel marking could save Zim $240mln annually, says expert

Fuel marking could save Zim $240mln annually, says expert

HARARE, August 9 (The Source) – Zimbabwe should accelerate its plans to introduce fuel marking as the programme could save the country at least $240 million annually in revenue lost to smuggling and eventually lower fuel prices, an industry expert has said.

The southern African nation’s energy regulator plans to introduce a fuel marking programme from January next year and has requested for expressions of interest from companies that provide the technology.

Marking involves testing the quality and quantity of fuel at source and at the distribution point to ensure compatibility. The programme would increase accountability in the fuel delivery chain and maintain quality from source.

“The value of the programme is very much in terms of saving excise revenue for the government. From that investment government should be able to pass it through to the benefit of consumers either through lower pump prices or through more investment in other areas downstream of the distribution chain,” Authentix vice president for Oil and gas Sten Bertelsen told The Source on Wednesday.

“There is high return on investment these programmes pay for themselves within months and government can use those proceeds for their own benefits.”

Authentix managing director for Southern and East Africa, Johann van Niekerk told journalists that the estimate of $240 million were ‘very conservative’ after the Zimbabwe Revenue Authority suggested recently that the cost of smuggled fuel was costing the State over $1 billion in undeclared levies.

Zimbabwe’s fuel remains highly priced when compared to regional peers mainly because of poor infrastructure and the various taxes charged on imports.

Diesel and petrol are charged taxies and levies amounting to 0,50 cents and 0,63 cents respectively. These include duty, ZINARA road levy, carbon tax, debt redemption, strategic reserve levy and the NocZim debt levy.

The later was introduced in 2003 to clear the now disbanded parastatal’s accumulated debt to mostly foreign fuel suppliers and is charged at 6,7 cents for petrol and 1,3 cents for diesel per litre.

According to the Zimbabwe National Statistics (Zimstat), the country imports 1,5 billion litres of fuel and lubricants at an estimated cost of $1,3 billion annually.

A recent study by Authentix analysing fuel usage and consumption patterns in the country noted that Zimbabwe’s vehicle to fuel ratio was nearly five-fold below that of neighbouring countries.

The research shows that an individual vehicle in Zimbabwe uses an average of 801 litres per year while neighbouring countries like Namibia, Mozambique, Zambia, Tanzania and Botswana have consumptions levels of 4,660 litres, 4,832 litres , 3,537 litres, 3,519 litres and 3,537 litres per vehicle.

This suggests that fuel imports into the country are massively under declared.