Harare: Parly quizzes Petro Trade bosses
Harare – The Parliamentary Portfolio Committee on Mines and Energy on Monday quizzed the role of fuel retailer, Petro Trade in loans that the government acquired from energy company Sakunda Holdings in 2014.
The Committee which is chaired by Masvingo Urban legislator Daniel Shumba said it wanted to understand why Petro Trade got involved in a deal in which it did not directly benefit from the loan that the government acquired.
“Petro Trade has no direct relationship to the loan. The loan was to government. What was beneficial to you to buy from Sakunda?” asked Shumba.
Responding to the committee Petro Trade acting chief executive officer Godfrey Ncube explained that the fuel firm got involved following a written directive from Energy and Power Development permanent secretary Patson Mbiriri.
It emerged during the hearing that the government initially received an interest free $5 million loan from Sakunda which would, in turn, receive a supply contract to Petro Trade, supplying 90 million litres in a period of six month.
“There was a Memorandum of Understanding signed between Sakunda, Petro Trade and Noic. That MoU was at the instigation of our parent ministry, the Ministry of Energy and Power Development.
“After that there was a letter that was written from the Ministry copied to the Office of the President and Cabinet and other departments that actually acknowledged that Sakunda had loaned government $5 million and therefore Petro Trade and Sakunda should actually implement the agreement in the form of a (supply) contract,” he retorted.
“Initially we were supposed to procure 90 million litres from Sakunda in a period of six months that commenced in May 2014. In June 2014, the government through its needs again requested another $1. 8 million from Sakunda and that resulted in us extending that contract by another six months and another volume of 90 million.”
“That contract did not last for 12 months because the economy did not perform well as anticipated. We had expected to sell around 30 million litres per month but due to economic challenges here and there we ended up selling 7 million liters per month and hence the contract was again extended from 2014 up to September 2016,” he added.
In response to how the loans were serviced, Ncube said their only role in the deal was to source their fuel from Sakunda, in fulfilment of an agreement that was there between the government and Sakunda.
“The servicing of the $5 million was not supposed to be Petro Trade’s baby. The servicing was coming from what is known as the strategic levy,” he said.
“All we did was to provide the off take or be the customer of the loaner of that $5 million to the government, but as far as the servicing Petro Trade was not involved.”
He said Petro Trade had in fact benefited from the arrangement because they would get the fuel in advance before paying unlike with other suppliers who demand cash up front. ZimbabweNewsday