Fuel smuggling ring busted

Daniel Nemukuyu Investigations Editor
Multiple fuel smuggling scams are being run in Zimbabwe with cheap fuel being smuggled from Mozambique, sometimes mislabelled to avoid customs duty, and sold or re-exported for hard currency while fuel bought in Zimbabwe for local currency is suspected of being smuggled out and sold for hard currency.

Recently, the Zimbabwe Revenue Authority arrested two men for smuggling into Zimbabwe five tankers of petrol, a total of 221 000 litres, using forged papers that designated the contents as crude de-gummed soya bean oil, which is exempted from duty.

This comes hard on the heels of an announcement by the Zimbabwe Anti-Corruption Commission (Zacc) that fuel was being smuggled into Zimbabwe from Mozambique and reshipped to South Africa, Zambia and the Democratic Republic of Congo.

The development also explains, investigators believe, why some fuel dealers can afford to sell fuel in foreign currency at prices much lower than those set by the Zimbabwe Energy Regulatory Authority (Zera), which allows only modest mark-ups on properly-taxed directly-imported fuels.

Complex cartels are reportedly importing fuel from Mozambique at prices in the region of 50 US cents a litre before taking it to neighbouring countries using forged export documents. Zacc is now demanding explanations from some 42 fuel companies of their fuel dealings.

Two suspects were arrested last month, the first on these sort of charges, for smuggling 221 000 litres of petrol from Mozambique via Forbes Border Post in Mutare.

They allegedly forged the import papers and misrepresented to Zimra officials that they were importing soya bean oil, duty-free.

Malvern Mugodoki (38) an agent working for Vernson Freight Pvt Ltd and Wellington Kusalaweka (34), who operates from Hurudza House in Mutare, were arrested on fraud charges. Mugodoki and Kusawela were freed on $10 000 bail each. However, the names of company or companies that imported the fuel were not mentioned in court.

According to the State, Mugodoki, a clearing agent, received petrol import documents from three truck drivers — Beven Munyaradzi Mavhaza, George Muzimbawake, and Langton Mabee — for processing.

He was tasked to facilitate the clearing of three trucks: registration number AEZ 3183 loaded with 45 000 litres of petrol, AEU 9772 with 41 000 litres and AEG 7618 with 45 000 litres.

After receiving the papers, Mugodoki allegedly connived with Kasalaweka to alter the original import documents where the product was indicated as petrol so that it reads ‘crude de-gummed soya bean oil’, exempted from paying import duty, the court was told.

“They went to Kasalaweka’s workplace at Hurudza House in Mutare where they forged the import invoices to indicate the product was crude de-gummed soya oil,” reads the court documents.

The pair later subcontracted Southern Business Services clearing agents, who are authorised to clear tankers, to do the work.

The subcontracted agents handed the forged documents over to Zimra officials for processing.

“Acting on the misrepresentation, Zimra produced the manifests for the three trucks,” reads the papers.

Later on Zimra received information that the tankers had petrol and that its officers had been duped.

Manicaland police CID together with Zimra officers swiftly reacted and impounded the trucks.

A check on the load proved the product to be petrol. The two were arrested and charged with fraud.

While seized with the case of three tankers, police also received information that two other tankers ferrying were awaiting fraudulent clearance by the same suspects.

The two trucks ferrying about 90 000 litres of fuel purchased by some two Harare-based companies were also impounded.

Manifests showing the false declarations and the computer used in the fraud were held as exhibits in respect of the first three tankers’ case.

The original import papers for petrol were recovered from the house of one of the suspects’ girlfriend while copies of the fake papers presented to Zimra were recovered at Southern Business Clearing Agents’ premises in Mutare.

Zimra spokesperson Mr Francis Chimanda said the Mutare case was the first one since reports on fuel smuggling filtered last year.

“Recently, five tankers were seized at Forbes Border Post for false declaration. The tankers were reported to be transporting crude soya oil while they were transporting fuel.

“Fake documents were submitted in support of the declaration. Zimra keeps records of all seized goods and in that record there is no fuel seizure as the most recent fuel seizures are the beginning on fuels,” he said.

However, Zimra has made a total of 60 seizures of different other goods at Forbes Border Post since January this year.

Zacc chairperson Justice Loice Matanda-Moyo is on record saying her investigations, the police and Zimra were jointly investigating fuel smuggling.

“Zacc and Zimra have been conducting an investigation into reports received, indicating that there has been a massive and expansive operation involving smuggling of significant volumes of fuel, mainly diesel and petrol through a number of our ports of entry.

“Investigations carried out thus far reveal the existence of a criminal fuel smuggling syndicate involving entities that are registered in Zimbabwe and in a neighbouring country.

“This criminal project has been in operation for a period of two years and its activities have caused financial prejudice to the Government of Zimbabwe and that of the neighbouring country,” said Justice Matanda-Moyo.

Early this year over 25 million litres of fuel smuggled from Zimbabwe were intercepted by police in South Africa.

The original source of the fuel is unknown; it could be diverted fuel bought in Zimbabwe dollars or re-exported cheap fuel smuggled from Mozambique.

Zacc has since asked 42 companies registered in Zimbabwe to furnish investigators with documentation relating to their fuel dealings.

The companies are: Global Oil, Com Oil Petrol, Victoria Falls Truck, Unique Jay, Nansane (Rosmitrick), Bankable Resources, Silver Air, Timkase Investments, Dexfueld Pvt Ltd, Chilota Mine, Mann Aggregates, Matriflex Oils, Bresville Investments, Fastlane Petroleum, Couderay Oil, Outrech Comm, Plulixey Petroleum, Bantu Africa Mining, Valley Field Holdings, Takunda Fuel Services, Musa Petroleum, Einstein Energy, Kinsey Mining, Emirates Valley, Afrifor, Megabest, Nelich Investments, BOL Supplies, Traderose Investments, Coalvart Enterprises, Kit Kat Enterprises, Skybuild Construction, Elkrus Pvt Limited, Getmack Fuels, Falika Pvt Ltd, Bustque, Talebrant Investments, Peritus, Downtown Fuel, Valbazen Enterprises, Quick Gases and Roomi Truckshop.

When customs duties were raised significantly at the end of 2018 to bring Zimbabwean pricing into line with regional norms, there were suspicions based on the dramatic rise in fuel purchases in Zimbabwe that fuel was being smuggled out of the country and sold on black markets in the region.

The recent exchange rate fluctuations and the premium paid on the black market for foreign currency have enhanced fears that the same problem may be resurfacing.

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