Page 11 - DMEA Week 11 2020

DMEA POLICY DMEA
ZERA responds to criticism of new licensing terms
ZIMBABWE
The Zimbabwe Energy Regulatory Authority (ZERA) has pledged to revise new licensing requirements for retail sellers of refined fuels, following complaints from a key player on the domestic petroleum product market.
THE Zimbabwe Energy Regulatory Author- ity (ZERA) has pledged to revise new licensing requirements for retail sellers of refined fuels, fol- lowing complaints from one of the biggest play- ers on the domestic petroleum product market.
Late last week, ZERA backed down from plans to hike licensing fees to as much as $2mn and require all applicants to produce a perfor- mance bond with a value of $30mn. It did so after the Indigenous Petroleum Association of Zimbabwe (IPAZ) filed a protest against the new policy in court, naming the Energy Ministry and ZERA as co-respondents.
ZERA responded formally to the court chal- lenge in a statement dated March 13. “Following submissions from stakeholders in the petroleum sector ... ZERA hereby makes the following state- ments: Section B of the said Notice which refers to procurement licences is hereby withdrawn to allow ZERA to fully consider the representations made by petroleum sector stakeholders,” it said. “Revised procurement licence conditions will be published in due course,” it said in a statement dated March 13.
IPAZ has criticised the new regulations, which were introduced earlier this month, as burdensome.
In its announcement unveiling the new policy regime, ZERA said that applicants would need to pay a fee of $1.53-2.00mn and meet other
conditions pertaining to its financial status and its business operations.
Among other things, the government agency said that it would not grant licences to applicants that could not show that they owned at least 25 retail outlets, each in a different province, with no more than two of the total number accepting payment in foreign currency. IPAZ was particu- larly critical of this requirement, alleging that it was designed to drive small fuel sellers such as its own member companies out of business.
The group also complained about ZERA’s demand that each applicant for a licence produce a performance bond with a value of $30mn. It called this rule unfair, explaining that it would have a difficult time meeting the standard since it was receiving only 1.7% of the government’s monthly support allocations of $120mn, despite the fact that its members account for 42% of Zimbabwe’s fuel sales.
IPAZ includes 77 locally based fuel retailers that banded together with the aim of securing more financial support from the government. Collectively, these retailers are among the six largest fuel importers in Zimbabwe. (The other five are Engen Petroleum Zimbabwe, Petrotrade, Puma Energy, Total Zimbabwe and Zuva Petro- leum. Unlike IPAZ, all five of these companies are capable of meeting ZERA’s new require- ments.) ™
Week 11 20•March•2020 w w w . N E W S B A S E . c o m P11