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Govt fuel sold on black market

Grace Kombora

FUEL procured by government agencies is finding its way onto the lucrative black market where it fetches higher prices compared to the formal market.

a, Arial, Helvetica, sans-serif”>Hundreds of thousands of litres of fuel have been siphoned from the state-run National Oil Company of Zimbabwe (Noczim) and CMED to the parallel market which has become a thriving sector of the underworld economy.

This comes at a time when the country is reeling from acute fuel shortages. Zimbabwe has been in the grip of a fuel crisis since 1999 due to lack of foreign currency. The country is now virtually dry on the formal market.

The black market, a preserve of the well-connected and powerful, has become the sole source of fuel for the whole economy. The ruling elite and their cronies who have access to foreign currency either hijack national stocks or buy fuel from neighbouring countries to offload onto the parallel market where racketeering is rampant.

A recent parliamentary portfolio committee report on the state of preparedness in the agricultural sector revealed thousands of litres of fuel secured at subsidised rates from Noczim for farming purposes had been diverted and sold on the black market.

Noczim distributes fuel directly to individual A2 farmers who purchase bulk quantities of over 5 000 litres. A1 farmers, on the other hand, apply for fuel from Noczim through the Agricultural Research & Extension Service (Arex) while the Energy and Power Development ministry vets the applications.

“Your committee was concerned that the current system was not watertight as it appeared to be riddled with glaring loopholes,” the report said.

“Agricultural stakeholders and Noczim officials confirmed to your committee that some unscrupulous farmers were channelling fuel meant for agriculture to the black market where it is fetching anything as high as $100 000/litre compared to the subsidised price they would have bought it for at $11 000/litre.”

A CMED audit report in the possession of the Zimbabwe Independent also revealed that fuel was disappearing in large quantities from the quasi-government agency to the parallel market. The report said 605 049 litres of fuel worth $1 billion at the subsidised price disappeared from the CMED in one month last year.

Of the total fuel which disappeared, 247 041 litres of blend worth $432 million vanished while 16 340 litres of unleaded petrol valued at $49 million could not be accounted for.

The report says 341 668 litres of diesel valued at $563,8 million could also not be accounted for. During the time of the disappearance, farmers, government departments and local authorities were receiving subsidised fuel at $1 650/litre for diesel, $3 000/litre for unleaded petrol and $1 750/litre for blend directly from Noczim at what is known as the “prescribed market” rate.

“A lot of fuel could be siphoned from the system without detection. The internal audit was not able to reconcile all purchases of fuel with deliveries,” the report says.

The Caltex invoices, which were used for fuel procurement, did not contain essential procurement details such as cheque number, receipt number or order number.

“The Caltex invoices, despite having a provision for order number, delivery station, cheque number and the name of the receiving officer is many a time incomplete,” it says.

The CMED scandal caused receiving stations to wait for fuel delivery without knowing the exact quantities to be delivered.

“At times the quantity ordered for them is communicated over the telephone but may not be what Caltex eventually delivers,” the report says.

“There is a serious internal control weakness imported into the fuel procurement and control process by the appointment of a Senior Loss Control Officer as the fuel procurement facilitator or coordinator,” the audit said.

The audit also noted there were outstanding fuel requisitions with a total of 79 000 litres of petrol, 94 600 litres of diesel and 60 litres of oil which were at Caltex Mutare offices.

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