News / National
Fuels situation to normalise this week
14 Oct 2018 at 04:41hrs | Views
Government expects the fuel situation to normalise this week after the Reserve Bank of Zimbabwe increased weekly allocations for imports for the second time this year to over $30 million.
This follows a huge increase in demand for fuel, and rising international oil prices.
Energy and Power Development Minister Dr Jorum Gumbo told The Sunday Mail yesterday that retailers were taking delivery of bulk fuel bought via a $41 million RBZ facility. Government has also relaxed regulations to allow bulk fuel to be transported at night, and given the National Oil Infrastructure Company the green light to load fuel around the clock.
"We have enough fuel in bond at Masasa and Mabvuku. There is no need to panic, the country will not go dry. The challenge we have is that of rising oil prices on the international market, which is something we have no control over and it is something that caught us unaware.
"You are also aware that the RBZ raised its weekly allocation for fuel from $10 million to $20 million earlier this year as a result of increasing demand and the skyrocketing prices of the commodity on international market," said Min Gumbo.
"What we have done is that officials from my Ministry have been negotiating with the RBZ to increase the allocation further to between $30 million to $35 million a week.
"During the meeting I had with officials from the oil industry on Friday, we agreed that an allocation of around $30 million to $35 million will meet demand and meet the gap caused by the international prices. We are happy that the RBZ has taken our recommendation and will do so," he said.
Dr Gumbo said letters of credit from the $41 million drawdown started reflecting on Friday.
"The other challenge is that when the RBZ released the $41 million for fuel imports, this was done through letters of credit and it takes between three and four days for the LCs to start reflecting at the suppliers' side.
"So by yesterday (Friday), most of the LCs began maturing and deliveries commenced. The situation is now stabilising in spite of the continued panic buying, but as the LCs continue to mature, deliveries will continue as well and within three days we could be back to normal. But as long as people hoard the product, the situation may drag for a few more days."
Government, he said, did not want to increase fuel prices despite increases on international markets.
Prices are pegged at $1,31 for diesel and $1,41 for petrol.
He added: "We are aware of some companies that are demanding US dollars payment for fuel; that should stop.
"We now have teams from (Zimbabwe Energy Regulatory Authority) and (Zimbabwe Republic Police) who are carrying out impromptu checks to see which service stations are selling only in US dollars.
"The public should report such illegal activities and the law will take its course. It is Government that is providing them with foreign currency for the fuel and it is not the fuel dealers who are sourcing the forex. Mobile money and swiping are legal ways of tendering in Zimbabwe."
This follows a huge increase in demand for fuel, and rising international oil prices.
Energy and Power Development Minister Dr Jorum Gumbo told The Sunday Mail yesterday that retailers were taking delivery of bulk fuel bought via a $41 million RBZ facility. Government has also relaxed regulations to allow bulk fuel to be transported at night, and given the National Oil Infrastructure Company the green light to load fuel around the clock.
"We have enough fuel in bond at Masasa and Mabvuku. There is no need to panic, the country will not go dry. The challenge we have is that of rising oil prices on the international market, which is something we have no control over and it is something that caught us unaware.
"You are also aware that the RBZ raised its weekly allocation for fuel from $10 million to $20 million earlier this year as a result of increasing demand and the skyrocketing prices of the commodity on international market," said Min Gumbo.
"What we have done is that officials from my Ministry have been negotiating with the RBZ to increase the allocation further to between $30 million to $35 million a week.
"During the meeting I had with officials from the oil industry on Friday, we agreed that an allocation of around $30 million to $35 million will meet demand and meet the gap caused by the international prices. We are happy that the RBZ has taken our recommendation and will do so," he said.
Dr Gumbo said letters of credit from the $41 million drawdown started reflecting on Friday.
"The other challenge is that when the RBZ released the $41 million for fuel imports, this was done through letters of credit and it takes between three and four days for the LCs to start reflecting at the suppliers' side.
"So by yesterday (Friday), most of the LCs began maturing and deliveries commenced. The situation is now stabilising in spite of the continued panic buying, but as the LCs continue to mature, deliveries will continue as well and within three days we could be back to normal. But as long as people hoard the product, the situation may drag for a few more days."
Government, he said, did not want to increase fuel prices despite increases on international markets.
Prices are pegged at $1,31 for diesel and $1,41 for petrol.
He added: "We are aware of some companies that are demanding US dollars payment for fuel; that should stop.
"We now have teams from (Zimbabwe Energy Regulatory Authority) and (Zimbabwe Republic Police) who are carrying out impromptu checks to see which service stations are selling only in US dollars.
"The public should report such illegal activities and the law will take its course. It is Government that is providing them with foreign currency for the fuel and it is not the fuel dealers who are sourcing the forex. Mobile money and swiping are legal ways of tendering in Zimbabwe."
Source - sundaymail
