12 April 2018

Zimbabwe: Paraffin Shortage Hits Zimbabwe

Photo: The Herald
The paraffin price has risen to between $1,30 and $1,50 per litre on the black market and is selling at $1,20 per litre at selected service stations.

Paraffin, a key energy source for low-income households, is currently in short supply and mostly available at higher prices on the black market.

A snap survey by The Herald Business revealed that the price of paraffin had risen to between $1,30 and $1,50 per litre on the black market and was selling at $1,20 per litre at selected service stations amid indications by the energy regulator that importing the fuel was not as lucrative anymore.

According to the Zimbabwe Energy Regulatory Authority paraffin imports have dropped significantly over the past two years. Imports of the fuel dropped to 23 647 385 litres in 2017 from 90 139 683 litres in 2016.

In a response to an enquiry by this publication Zera acknowledged the decrease in paraffin imports and availability in the country.

Zera said paraffin imports were previously not charged duty, which some operators took advantage of to import large quantities, which they blended with diesel and sold to unsuspecting motorists. The practice had side effects on motorists' vehicles. The energy industry regulator also said that adulteration of diesel prejudiced the Government millions in potential revenue.

But when Government introduced duty on paraffin, imports dropped, as illegal blending with diesel became less profitable.

Zera last year introduced fuel marking and immediately carried consultations to ensure that consumers got clean and unadulterated fuel.

The fuel marking strategy entails putting a bio-chemical liquid (fuel marker) into the petroleum products at the loading depots.

This means that any dilution with other substances is quickly detected and appropriate corrective measures are then taken.

Zera senior electrician Mr Zaranyika, said the implementation of the fuel marking programme was expected to enable Government to reduce fuel smuggling into the country and recover revenue that would have been lost through illegal sales and tax evasion. Mr Zaranyika also highlighted that non-taxed fuel was being smuggled into the country and sold illegally through various dealers.

"Zera and the Government have seen it prudent to embark on fuel marking due to a number of reasons. After noting numerous incidents of extremely low priced fuel at a number of unregistered outlets, an increase in the importation of paraffin and uplifting of Jet A1 from depots for use as paraffin and several cases of poor quality fuel from some outlets, it became clear that some unethical fuel traders were involved in illegal activities," Mr Zaranyika said.

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