Zimbabwe fuel queues ease after prices rise

Long fuel queues were once among the most common sights on Zimbabwe's busy streets, but the snaking lines of cars waiting to refuel have disappeared in the past week following a 150 percent price hike.

Queues outside pump stations used to stretch for kilometres. But the situation is changing after President Emmerson Mnangagwa more than doubled the retail price of petrol and diesel in a move meant to boost fuel supply that had been severely curbed by foreign-exchange shortages.

The 150 percent fuel hike sparked violent protests, with chaos in most major cities as police used tear gas and water cannons to disperse protesters.

The protests initially focused on a rise in fuel prices but later grew to reflect anger at rising living costs, particularly in urban areas, and other grievances against Mnangagwa's policies.

There has, however, been a silver lining with the end in the queues at pump stations.

Energy and Power Development minister Joram Gumbo told the Daily News the government is looking forward to total normalisation of fuel supplies countrywide by this week.

Gumbo said: "We however, expect things to normalise as at the moment things are going well and we hope things will continue that way, as long as people continue buying and using fuel they need and avoid hoarding."

He said there were a few "constraints to supply the outskirt areas because of logistics."

Reserve Bank of Zimbabwe governor John Mangudya told the Daily News the disappearance of fuel queues reflects the realignment of supply and demand for fuel as a result of the increase in price.

"It shows that the price elasticity of demand for fuel is relatively elastic. It conforms to the law of demand. The existing financial facilities that we have put in place are sufficient to cater for the country's fuel requirements that currently stand at around $80 million under normal conditions," Mangudya said.

Asked about the sustainability of the recently ushered in heavily-subsidised urban mass transport system that has seen State-owned bus operator Zupco entering a partnership with private public transport operators, Mangudya said the new system is manageable.

"The fuel requirements for Zupco are quite manageable moreso given the reduction in the demand for fuel in the country. Zupco enjoys economies of scale," the RBZ boss said.

Gumbo explained that Zimbabwe never had genuine fuel shortages, saying alarmists caused the shortages through fake news that sparked panic buying and hoarding.

"Now that the government got rid of black market through controlling fuel prices, people are now not able to hoard fuel and the demand in black market has also crumbled," Gumbo said.

"We are happy about the improvement and we hope it continues to be like that."

Prior to the price adjustment, Zimbabwe had recorded a 100 percent increase in fuel consumption which saw imports hitting 4,1 million litres of diesel per week and 3, 8 million litres for petrol.

But critics said the fuel price hike, while addressing the shortages, would slash economic production.

"The huge rise in fuel costs shows a minister of Finance working from a textbook: if supply can't meet demand, scale back the demand by making costs prohibitive. The only problem is that this stifles economic activity and, in turn, greater economic problems appear," political analyst Stephen Chan said.

While business leaders insist that government prioritise their needs and allocate them special allocations, Gumbo said this is not possible.

"If any company or business need fuel or oil they should personally engage the oil suppliers on their own. Government's duty is to make the environment conducive for companies and enhance fair distribution of fuel," he said.

Motorists have hailed the end of queues.

"The situation is much better now because we used to spend up to six hours just to fill up. Now things are much better. I can do so within minutes," said motorist Ronald Mutero.