AS the sun rose over the small city of Kadoma, the streets came alive with the hustle and bustle of daily activity.
But amid the usual sights and sounds, one thing stood out: the sheer number of service stations that lined the roads.
In a city of modest size, it was astonishing to see over 15 service stations mainly lined up along the Harare-Bulawayo Highway, some of them mere metres apart.
It was as if the town had become a hub for fuel retailers, with new stations popping up seemingly overnight.
Kadoma mayor Nigel Ruzario attributed a surge in the number of service stations in the city to "a good investment environment" and the fact that the city "is a mining area."
"We are happy because the people who are investing here are residents of this town. It is not outsiders,” Ruzario said.
“People are attracted by a good investment environment.
"Kadoma is a mining town, and this explains why we have so many service stations.
- Kadoma mayor pledges quality service delivery
- Kadoma residents fume over waste
- Pregnant girls turn to backyard abortion services
- Revealed: Net closes in on Chinese 'fraud kingpin'
Keep Reading
“There are about 20 service stations in Kadoma, a number of them situated along the Harare-Bulawayo Highway."
He also cited an increase in the number of vehicles as one of the reasons behind the proliferation of service stations.
Truth Diggers recently visited Kadoma and discovered that some service stations were less than 200 metres apart.
Truth Diggers is an investigative unit under Alpha Media Holdings (AMH), publishers of NewsDay, The Standard, The Zimbabwe Independent and Southern Eye.
AMH also operates an online radio and television station Heart and Soul.
Emerging fuel players in Kadoma include Super Fuel, Zuva, Cranrid Petroleum, Spencer Fuels and DA, who have joined traditional petroleum companies Redan, Puma and TotalEnergies, among others.
But not everyone is pleased with this development.
Some residents are raising concerns that these service stations are not just innocent businesses, but rather fronts for money laundering activities.
"It's just too many," said one resident, who wished to remain anonymous. "I mean, what's the logic behind having two service stations right next to each other?
“It just doesn't add up."
The concerns were not unfounded.
Over the past few years, Zimbabwe has witnessed a rapid proliferation of service stations across the country.
Regulators issued over 3 300 licences in just four years, and it seemed that anyone with the means could set up a fuel station.
But what is driving this trend?
One answer lay in the fact that fuel is largely bought and sold in US dollars, making it a lucrative business for those involved, according to Harare City Council works and town planning committee chairperson Takudzwa Dzumbunu.
With modest investments, owners could reap significant profits, making it an attractive venture for many.
However, this has also led to a situation where service stations were being built in questionable locations, such as road servitudes, residential areas, and even near water sources.
In some cases, the distance between two fuel stations is as short as 100 metres, which may be acceptable in suburban shopping centres, but is overly dense elsewhere.
The lack of regulation and oversight has created a free-for-all environment, allowing anyone to set up a fuel station with little regard for the consequences.
This issue is more prevalent in Harare.
Some service stations have been built without council approval, often in residential areas, posing serious public safety concerns due to the highly flammable and toxic nature of diesel, petrol, and paraffin.
A commission of inquiry set up by President Emmerson Mnangagwa to investigate the affairs of Harare City Council recently revealed that several service stations had been constructed near houses and flats in residential areas.
Dzumbunu acknowledged the lack of oversight in service station construction before the commission of inquiry.
When questioned about the local authority's inaction, Dzumbunu claimed that property owners were exploiting a loophole by changing land use to service stations.
However, Thabani Mpofu, a member of the commission, countered that property owners should obtain permission from authorities before making such changes, which can then be approved or rejected.
Mpofu highlighted three specific instances of service stations built in residential areas, warning that these cases represent only a small part of a larger problem.
“There is one that is currently under construction and near completion, along West Road in Avondale,” he said.
“I would say it is about 100 metres from the West and Suffolk intersection and then less than 500 metres from there, we have another service station at the corner of Sydney Malunga Road (formerly Argyle Road) and West Road.
“Now both service stations are what would colloquially be called smack bang in the middle of residential areas.
“Those two service stations are neighbours to residential areas. One of them is a neighbour to residential areas on three sides, the other one on two and these are just two that I have chosen.”
Dzumbunu also told the commission that fuel stations should not be built within a radius of 400 to 500 metres from residential areas, adding that the minimum stand size for a fuel station should be 2 000 square metres.
Fuel imports
According to Zimbabwe Energy Regulatory Authority (Zera) chief executive officer Edington Mazambani, the country imports about 130 million litres of combined diesel and petrol per month, translating to 3,1 billion litres per annum.
“This has been enough for the country as no shortages have been reported in the past five years,” Mazambani said.
“A total of 934 retail sites have been licensed to date, of which 47 retail sites are newly built.
“It's a sign that the demand for petroleum products is going up and, therefore, investors have seen a business opportunity.
“At the same time, Zera also believes that it is a sign that the economy is growing, and investors have confidence in the environment.”
National Oil Infrastructure Company (Noic) chief executive officer Wilfred Matukeni said pumping capacity had increased from 2,1 billion litres to three billion litres per year.
“There has been an increase in the year-to-date volume pumped from 1,675 billion litres in 2023 to 1,890 billion litres this year with a projection of 2,3 billion litres to year end,” Matukeni said.
“There has also been a significant increase in the consumption of fuel during this year.”
According to Noic, current supply is adequate to meet local demand.
"Fuel collections from the companies’ depots have increased from 177 million litres in September to 197 million litres in October 2024,” Matukeni indicated.
“The supply of fuel to service stations is dependent on the respective oil companies’ logistical arrangements.
“Current supply is adequate to meet local demand."
About the service stations that sell fuel for as little as US$1 a litre, Mazambani said the authority was not aware of such low prices.
"Zera sets the maximum retail prices every month using an approved formula. However, the authority is aware of fierce price competition in the fuel sector," he said.
Money laundering
Former Finance minister Tendai Biti said service stations were used as a conduit for money laundering.
Money laundering is a process that criminals use in an attempt to hide the illegal source of their income.
By passing money through complex transfers and transactions, or through a series of businesses, the money is “cleaned” of its illegitimate origin and made to appear as legitimate business profits.
“I think planning authorities; in particular the City of Harare and the Ministry of Local Government are not doing their job. Because you can't build within 100 metres of a residential place,” Biti told Truth Diggers.
“But these guys are converting houses into gas stations. So that's the way things happen because hydrocarbons are so inflammable.
“So, this is dangerous and a threat to human life. But more importantly, this reflects that these stations are just conduits of money laundering.
“These conduits of money laundering, if you go to a gas station, you never get a receipt. You never get a receipt because there's no accountability.
“These stations are being used to dry-clean money and to launder money in Zimbabwe.
“Because we are a US dollar economy. Nothing can be done because those that are running the government are the ones that own those fuel stations.”
However, Mazambani said Zera “has no evidence to that effect (of money laundering).”
Efforts to get a comment from the country's Financial Intelligence Unit responsible for monitoring money laundering activities hit a brick wall.
Fuel smuggling
Mazambani admitted that fuel smuggling was a serious challenge in the country and within the region.
He said Zera is part of a regional initiative to curb fuel smuggling and law enforcement agencies have been alerted about this scourge.
In a bid to curb fuel smuggling, Finance, Economic Development and Investment Promotion minister Mthuli Ncube announced in his 2024 mid-term budget review that all fuel imports — including petrol, diesel, paraffin, and jet A1 via road would require payment of duty and levies upon entry, effective August 10, 2024.
The duty and levies will be refunded at the port of exit, provided all transit procedures are followed and proof of export is submitted.
The parliamentary committee on budget also criticised the policy, labelling it as “laborious” and of limited benefit.
Last year, Zera arrested 292 individuals who were already operating illegally and others who were setting up shop without authorisation.
Environmental, safety risks concerns
Residents and environmentalists raised concerns about the environmental and safety risks posed by the proliferation of service stations in Harare’s residential areas.
They accused the city council and regulatory bodies of corruption.
“It is true that there are too many filling stations being opened in Harare. This is of serious concern,” Precious Shumba, director for the Harare Residents Trust told The Standard.
“The City of Harare in partnership with the Environment Management Agency should cooperate to protect the environment and implement town planning laws, regulations and by-laws.”
City of Harare spokesperson Stanley Gama referred questions to Zera and Environmental Management Agency (Ema), saying they are responsible for licensing fuel service stations.
He also said when a service station is built, residents are consulted, meaning development happens only when the residents agree.
Ema spokesperson Amkela Sidange said issues of fuel stations were not under the agency’s purview.
“This has a ministry; a specific ministry that is able to say when a fuel station is here it is safe for people, and the fuel stations they are located in Harare, who are the land owners, who are the planning authorities,” Sidambe said.
“So it is not about Ema failing to control the sprouting of fuel stations.
“How Ema comes in is through the EIA [environmental impact assessment] process because this is a petroleum project, and it's a prescribed project according to the Environmental Management Act.
“So that's why when, whoever is coming up with a fuel station has been allocated land, and has done all the papers with the relevant ministry that actually licenses the fuel station, then they submit their EIA to Ema.
“Of which an EIA is not an Ema process alone. It is very multi-sectoral, including even the expected departments in that project.
“So, at the end of the day, it is not really that this is Ema's failure or Ema is failing to monitor the situation. Ema comes in through the bit that is a prescribed project.”
Efforts to get a comment from Energy and Power Development minister Edgar Moyo and his permanent secretary, Gloria Magombo, were fruitless.
As the people of Kadoma went about their daily lives, they could not help but wonder what lay behind the proliferation of service stations in their town.
Were they really just innocent businesses, or was there something more sinister at play?
Only time will tell.
