The Sunday Mail
Kudakwashe Mutandi – Business Reporter
GOVERNMENT is considering banning the transportation of imported fuel by road as measures that have been put in place to force importers to use the pipeline have failed.
About 35 percent of fuels are still being transported by haulage companies despite the lower costs of carting through the pipeline.
The Ministry of Energy and Power Development has since engaged two other Government ministries to try and craft a framework to push through the envisaged policy.
Energy Minister Mr Dzikamai Mavhaire said recently Government wanted to curb leakages arising from road transport.
“My ministry is discussing with the Ministry of Industry and Commerce, and Transport and Infrastructure Development to curb usage of road on fuel transport and confine cartage of fuel from Beira to Harare to the pipeline.
The intention is to ensure that all fuel including that for neighbouring countries is pumped into Zimbabwe and then picked up from our depots. This should curb leakages, if any,” said Minister Mavhaire.
It is believed that importers are reluctant to use the pipeline because of various challenges that include the inconvenience of using the pipeline from the Mozambican port of Beira to the Feruka oil refinery in Mutare before further transportation to Msasa in Harare.
Market rumours also suggest that some rogue traders are duping the taxman by pretending to be transporting fuel to other regional countries and subsequently offloading it onto the local market.
It is estimated that between 30 to 50 million litres is being hauled by trucks through the Beitbridge and Forbes border posts destined for other countries, avoiding the critical investments made by Government in the form of the pipeline and BBR ( Beitbridge-Bulawayo Rail).
In 2011 Government had to introduce US$0,04 cents per litre road fuel levy to try and force importers to use the cheaper mode of transport.
Also, forcing fuel importers to use the pipeline would generate the load needed to pump the commodity through it.
“In 2011 my ministry put in place a levy of four cents per litre on all fuel imported by road. The charge was meant to discourage the use of the road.
“This, however, does not include fuel in transit to other countries such as DRC, Zambia and Malawi who also import fuel by road from Beira and such tankers pass through Zimbabwe.
“Other issues that come to the fore include the damage to roads and the environment by these tankers,” added Minister Mavhaire.
Industry players said while the pipeline was a cheaper mode of transporting fuel, the industry is so segmented that it would be difficult to co-ordinate the procurement of petroleum products in bulk in order to justify the use of the pipeline.
It costs US$0,08 cents a litre to transport fuel by the pipeline from Beira to Msasa in Harare.
However, the haulage companies charged US0,09 a litre over the same distance.
Importers have been imploring Government to scrap the levy by claiming that the National Railways of Zimbabwe and the National Oil Company of Zimbabwe had poor infrastructure to efficiently transport fuels, including asking Government for a rebate of US0,02 cents in order to ensure that their costs remain unchanged.
There have been suggestions that Government should
build buffer stocks at Msasa reservoirs so that once companies brought their fuel through the pipeline, they could immediately access it.
The country has made efforts in raising the pumping capacity of Feruka oil pipeline linking Beira and Harare fuel depot after introducing drag reducers in a bid to increase fuel supplies into the country.
There are also efforts by the Government to make Zimbabwe a regional petroleum hub, in line with a new five-year economic blueprint, the Zimbabwe Agenda for Sustainable Socio Economic Transformation (ZimAsset).
The Feruka pipeline now has the capacity to pump 180 million litres of fuel per month from the previous 120 million litres.
However, current pumping is around 110 million litres a month or less.
Meanwhile, a number of investors have put forward proposals to build a second pipeline to Government.
South African-based company Mining Oil and Gas Services intends to construct a multi-billion-dollar fuel pipeline linking Beira and three Southern African countries through Zimbabwe.
The proposed pipeline will start in Beira and run through Zimbabwe in Harare and Bulawayo. From Bulawayo, it will run south-west to Botswana and run north through Zambia to
the Democratic Republic of Congo.
The proposed project would be implemented in phases, with the first stage involving the construction of Beira-Harare section
at an estimated cost of US$1 billion.
The pipeline will run parallel with the Feruka oil pipeline linking Beira and Msasa fuel depot in Harare and will have an estimated capacity of 500 million litres of fuel per month.
