Fuel marking in January 2017
ZERA chief executive officer, Gloria Magombo
AN executive with the Zimbabwe Energy Regulatory Authority (ZERA) has indicated that the country will start marking fuel in January next year, a move that would help combat fuel fraud, the Financial Gazette’s Companies and Markets (C&M) can report.
Fuel marking will be done by an independent organisation at the point of entry or when loading at a bulk deport.
ZERA chief executive officer, Gloria Magombo, said the energy sector regulator would go to tender soon to select firms to implement the project.
“We are planning that by January next year the project is actually rolled out,” Magombo told a parliamentary committee last week.
“We should be going to tender next week,” she added
Zimbabwe has been facing fuel supply problems such as smuggling, adulteration and dilution all of which deprive the government of tax revenue.
ZERA first announced plans for fuel marking last month.
To combat fuel fraud, this concept involves 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 is quickly detected and proper enforcement procedures are then 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 government.
To stamp out this malpractice, government has resorted to fuel marking in order to identify offenders and punish them accordingly.
ZERA will be working 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 ensures maximisation of 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 is saved by ensuring that the general public is not buying substandard fuel that damages their assets.
It forms a solid base for gathering accurate fuel importation and consumption statistics and protects genuine oil industry players by putting in place an enabling fuel quality monitoring and enforcement mechanism that weeds out undesirable elements.