Drop in fuel price revives cross border trade

A recent decrease in the price of petrol, diesel and paraffin has resuscitated the cross border petroleum trade between Botswana and Zimbabwe, The Voice reported.

For the past year or so, Zimbabwean cross border traders specializing in petrol, diesel and paraffin had stopped flocking into the country to buy the flammable liquids to sell in their economically crippled country at a profit due to relatively higher fuel prices locally.

But the recent reduction of crude oil prices combined with a government subsidy has resulted in the petrol and diesel costing far less than a dollar per litre while the same is selling at almost double the price in Zimbabwe.

The price reduction was announced on Wednesday last week and already industrious and enterprising Zimbabwean informal traders have started flocking the country to buy and sell petrol across the border on the black market.

Since there is no government subsidy in Zimbabwe, a litre of petrol costs between US$ 1.44 and US$ 1.50 (about P15 per litre) while diesel sells at between US$ 1.28 and US$ 1.32 (about P13 per litre).

In light of the recent decline in prices of crude oil, petrol and diesel prices had been experiencing a downward trend.

Minerals, Energy and Water Resources Ministry, said in a press release when announcing a reduction on retail pump prices of all petrol grades by 15thebe last week.

All diesel grades and retail pump prices for illuminated paraffin decreased by 40thebe stated the press release from the ministry.

This is to keep the price of fuel in sync with the international rates, the press release noted.

Meanwhile big trucks with Zimbabwean registration numbers loaded with 200litre drums filled with petrol heading towards the direction of the former breadbasket of Africa have been on a sharp increase.

Filling stations in Francistown have also confirmed that there has been a sharp increase in the number of vehicles parking at their work premises with drums needing to be filled with petrol or diesel for reselling in Zimbabwe.

The development has resulted in the proliferation of illegal fuel dealers on the black market in Zimbabwe's different cities and towns.

So serious is the situation that filling stations in Zimbabwe are being pushed out of business by the illegal fuel dealers, Voice Money has learnt.

Obvious Marange, the chairperson of the Victoria Falls Fuel Dealers Association told this publication in a telephone interview that illegal fuel dealers cross over into the country and buy petrol and diesel in bulk for reselling in Zimbabwe.