The Zimbabwe Energy Regulatory Authority (ZERA) has warned service station that it is illegal for them to sell fuel bought using foreign currency bought on the auction in foreign currency only. These days it is very rare to find a service station selling fuel in Zimbabwean Dollars, this is despite the fact that service stations are buying some of their foreign currency from the weekly auction.

It is illegal to refuse to accept all forms of payment (if fuel was purchased using local currency) and Zera is working with law enforcement agencies to ensure compliance in the sector. Only operators who would have used their own offshore funds to source fuel from the traders may sell the product in the currency of their choice.

Zera chief executive officer Engineer Eddington Mazambani

A whole lot of confusion and corruption

The thing is before the foreign currency auctions began, fuel companies were allowed to do what are known as Direct Fuel Imports (DFI). Under the scheme service stations would use free-funds i.e. their own foreign currency (probably bought on the black market) to import fuel. They would then be allowed to sell this fuel in foreign currency and most chose to sell in foreign currency only.

Now it’s all confusion. Most service stations buy fuel using funds bought on the auction and also buy fuel using their own funds. How can they separate between the two when it comes to actually selling becomes a matter of confusion. Do you sell 5 000 Litres bought using auction funds in any currency first and then switch to USD sales only? What if that mark is reached in the midst of serving a customer? Things would be simpler if you have multiple tanks and pumps but if you only buy a small quantity of fuel either using DFI or auction funds it might mean one of the pumps/tanks being idle once its fuel runs out.

The thing is service stations know how hard it is to prove that they have done something wrong. Given the facts it would be hard for ZERA let alone customers to prove that a certain service station is violating the law. They can just claim they have already sold all the fuel bought using auction funds.