Fuel smuggling on the rise

THE quantity of smuggled petrol and diesel, disguised as duty-free illuminating paraffin, surged almost 600 percent between 2009 and 2016, with illegal fuel imports from neighbouring Mozambique flooding the Zimbabwean market.

Data gathered by the Weekend Post from transporters, border clearing agents and the Zimbabwe Revenue Authority (Zimra) indicated that there were elaborate corruption rings importing the fuel leading to the spike in paraffin imports from 12,7 million litres per annum in 2009 to 75,8 million litres in 2016

“As a transporter, I would tell you that my trucks brought in a lot of diesel belonging to the big guys which came in as paraffin and the tankers would never be checked at the border.

“They would just work with what would have been declared on the forms,” one transporter, who spoke on condition of anonymity, told this paper.

This comes as Finance minister Patrick Chinamasa introduced a $0,40 per litre duty on the importation of paraffin effective from beginning of the year, to curtail what he said was the abuse of paraffin which is being blended with diesel.

“This is a clear testimony that paraffin which is exempt from excise duty is being abused and used by unscrupulous traders for blending with diesel in order to achieve a high profit margin thereby prejudicing revenue to the fiscus and causing unnecessary damage to motor vehicles,” Chinamasa said in his 2017 National Budget.

Zimra officials at Forbes Border Post and cargo clearing agents also said the practice was now wide-spread, with most of the fuel trucks being chartered by the “big-fish”.

This has led to an astronomical hike in paraffin importation statistics as the substance was uncontrolled making it the smuggling method of choice.

While the smuggling rings were never busted due to rampant corruption, Zimra chairperson, Willia Bonyongwe is on record saying the situation has led to potential revenue loss of more than $23 million per annum.

While cases of contamination of diesel by paraffin increased in the 2015/2016, Zimbabwe Energy Regulatory Authority (Zera) — which carries out fuel quality monitoring nation-wide — has reported “instances of quality violations” but has not come forward to explain the 600 percent jump in paraffin imports.

“In 2015/2016, there was an increase in cases of diesel contamination with paraffin and a number of retail sites were prosecuted and convicted for this offence with the products being confiscated to protect the consumers,” Zera chief executive Gloria Magombo said.

Magombo, however, pointed out that Zera had recommended the introduction of duty on paraffin.

“The authority made several recommendations including introduction of duty on paraffin to address diesel adulteration with paraffin,” she said. —Bernard Chiketo in MUTARE

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