FUEL players have approached the High Court challenging the Zimbabwe Energy Regulatory Authority (Zera) notice which announced an 8 600 percent hike in licence renewal fees.

According to the Indigenous Petroleum Association of Zimbabwe (Ipaz), the increase will see fuel players paying up to $2 million per year, up from $23 000.

“This is an urgent application seeking to interdict the first respondent (Zera) from giving effect to the terms of conditions for renewal of licences contained in a notice issued by the first respondent dated the 9th of March 2020, the terms of which notice will take effect from the 31st of March 2020.

“The application also seeks to have the aforesaid notice declared unlawful and therefore invalid.

“In addition, the application seeks to have the first respondent’s board declared to be improperly constituted and as such, to have its decisions declared null and void,” Ipaz said.

According to the organisation, which cited Zera and Energy minister Fortune Chasi as respondents, prior to the introduction of the multi-currency system in 2009, the petroleum industry was dominated by large multi-national companies such as Caltex, Mobil, BP Shell and Total, with a few indigenous players.

In an affidavit, the organisation’s chairperson Aaron Chinhara said due to the tough operating environment riddled with shortages of foreign currency and inflation, the industry was on its knees.

The organisation, which has 260 members, said multi-national companies had deserted the industry, leaving a yawning gap, which gave birth to indigenous players.

Ipaz said it was always consulted by Zera on issues to do with licensing and it had been taking on board some of its views and recommendations.

“Applicant’s members had previously never had issues when it came to the renewal of licences.

“However, towards the end of last year, the applicant was surprised to hear that some players in the industry wanted to force applicant’s members out of business by hiking fees and other terms and conditions for renewal of licences beyond the reach of applicant’s members,” Chinhara said.

He further said that some of the members paid $306 000 for licences, which is the amount that was initially proposed.

“On the 9th of March, the first respondent dropped a bombshell when it published a notice headed: Petroleum Sector Notice: Licensing of Petroleum Sector Operators 2020.

“The contents of the notice confirmed our fears regarding the imposition of stringent requirements that we sought to stop notwithstanding the assurances we had been given by the first respondent,” he said.

The organisation agreed to engage Zera to withdraw its notice, adding that the board was also improperly constituted.

The fuel players said the licence fees hike was a threat to their business operations and could make a number of people jobless.

“There would also be a shortage of fuel if 260 service stations with a capacity of millions of litres of fuel in the industry are forced out of business.

“Some these members are holders of free funds so that the acute shortage of fuel in the country is alleviated.

“However, disqualifying them from obtaining a licence would mean that no such fuel is imported and the already crippling shortages would continue to worsen,” Chinhara said.

Zera and Chasi have not yet responded to the application, which is pending before the High Court.