Zimbabwe fuel suppliers who obtain foreign currency to buy fuel from the foreign currency auction market and then sell that fuel in United States dollars are committing two offences each time by depriving motorists of fuel in the local currency and avoiding proper tax by paying it in the local currency.
Finance Minister Mthuli Ncube told the Senate yesterday that when the suppliers obtain the foreign currency the condition is that they should sell fuel in Zimbabwe dollars.
“They do not comply, they proceed to sell in USD. They also go further and pay the taxes as well which ought to have been paid in USD; they pay excise duty in ZWL. So, there are two offences here – depriving the public of ZWL fuel and then depriving the fiscus and the public of rightfully earning taxes,” Ncube said.
“That is an issue we are dealing with and we have decided to really narrow the space and put in a facility through NOIC so that it is part of the architecture of accessing the fuel in the first place, making sure that it is available in ZWL.
“It is our expectation that this will improve the availability in ZWL. The moment you have these kinds of Shenanigans, you also now have interplay between the fuel market and the parallel market feed into each other. People looking for arbitrage gaps, it is part of the game that they play but we are working hard to close that gap to make sure that the public are better treated by the fuel companies.”
Q & A
*HON. SEN. KOMICHI: Thank you Mr. President. We have noted that petrol and diesel is not available in RTGS and in local currency. We have expressed our concern but we are not getting any feedback. We were told that this is going to be corrected but so far there is no response. My issue today is that even gas which is now being used in most urban households is not found in local currency. We know that we are facing severe shortages of electricity and as a result, many people are using gas. Does it mean that the country is going to full dollarisation whilst workers are not getting salaries in USD? This has put a lot of pressure on our people, so what is the Government doing to better the people’s livelihoods? I thank you.
THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Let me thank the Hon. Senator for his pertinent question regarding petrol and diesel charges which are now being pegged in USD whilst our local currency is not being applied to petroleum.
Our currency is the ZWL, it is no longer referred to as RTGS, so the Hon. Senator is saying that local currency is in short supply. He also mentioned that gas is not readily available. Let me say that petrol, diesel and gas in local currency are in short supply. So the biggest thing that we need to do as Zimbabweans is to eliminate corruption before pointing fingers at the Government. The total eradication of corruption, our RBZ and the Ministry of Finance are busy promulgating legislation and policies which seek to guide the nation on fiscal and monetary issues whilst people are busy engaging in corrupt activities.
May you allow me Mr. President Sir, that since the Hon. Minister of Finance and Economic Development is in the House, he could respond to this issue? However, in short I would like to say as Government, we have got policies which support our currency but because of speculators and corrupt individuals, you will discover that our exports and foreign currency earnings compared to other countries, Zimbabwe is supposed to be one of the most stable currencies or economies. So we ask where this is coming from, the RBZ gives USD to Petroleum industry but people are engaging in deals instead of using those monies to procure fuel. The biggest thing that we need to do as Zimbabweans is to eliminate corruption because it is detrimental to the success of the economy.
We know that when a new policy is promulgated, there are people who seek to compromise that policy but the Hon. Minister of Finance’s team and the Governor of the RBZ are busy working on correcting these anomalies. Recently, they mentioned that we are seeking a way of guiding people in terms of money markets. Some of the things cannot be shared but Hon. Members of Parliament and Senators should take it upon themselves to educate people so that corruption is eradicated. I thank you.
THE DEPUTY PRESIDENT OF SENATE: Hon. Minister of Finance and Economic Development, Hon. Prof. M. Ncube, a question has been raised by one of the Hon. Senators concerning the fact that fuel now appears to be available in USD; there is no fuel which can be bought using our local currency.
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): It is certainly true that if you go to most of the service stations, there are more of them that are selling fuel in USD and not in ZWL as they would have promised us. Some of these fuel operators would come to the auction to source USD to purchase fuel. They are successful in doing so but they go on to pay for this fuel but the condition is that they should sell in ZWL, they do not comply, they proceed to sell in USD. They also go further and pay the taxes as well which ought to have been paid in USD; they pay excise duty in ZWL. So, there are two offences here – depriving the public of ZWL fuel and then depriving the fiscus and the public of rightfully earning taxes.
That is an issue we are dealing with and we have decided to really narrow the space and put in a facility through NOIC so that it is part of the architecture of accessing the fuel in the first place, making sure that it is available in ZWL. It is our expectation that this will improve the availability in ZWL. The moment you have these kinds of Shenanigans, you also now have interplay between the fuel market and the parallel market feed into each other. People looking for arbitrage gaps, it is part of the game that they play but we are working hard to close that gap to make sure that the public are better treated by the fuel companies.
*HON. SEN. KOMICHI: Thank you Mr. President. We talked of petrol and diesel. After having said this, you have taken too long to solve the problem with these fuel companies and other companies have joined in to do the same practice, such as the company that sell the LP gas. You know the LP gas now is very important, it is being used by ordinary people. Now, people can no longer afford to buy this gas using the Zimbabwean dollars because the companies are saying they want to sell in US dollars. Have you put these companies under your list of investigation?
HON. PROF. M. NCUBE: Thank you Mr. President. Hon. SEn. Komichi has raised a very important issue and I wholly agree with his observation, that again there are some shenanigans coming out of the gas companies as well. Very similar to the fuel companies, we have put them definitely on our watch and investigation list. Again, we want to close that loophole where they access money from the auction in US dollars but then end up selling in US dollars when they should give the public relief and selling in Zimbabwean dollars. They are certainly on our investigation list. I thank you.
