'Queen Bee' company to supply Zimbabwe with 1.6 billion litres of fuel

THE fuel supply situation in the country has stabilised after local petroleum giant Sakunda Holdings and its partners last week provided Government with 100 million litres of fuel, which will only be paid for after 12 months.

This comes amid revelations that to ensure adequate fuel supplies over the next 18 months, Government and Sakunda are finalising a deal that will see the latter supplying the country with 1,6 billion litres of fuel.

Other players like Independent Petroleum Group (IPG), Glencore, Engen and Total have also chipped-in and are working on various structures with Government. Energy and Power Development Minister Dr Joram Gumbo yesterday said the improvement in fuel supply came after the intervention of major companies.

"The fuel situation is stabilising and we hope that we continue on this path," he said.

"As Government, we have put in place some mitigatory measures and these mainly include a facility we are concluding with Sakunda and its partner Trafigura. The deal is already in motion and it will stand for the next 12 to 18 months. The draw down began last week and we were given 100 million litres upfront and it is one of the facilities that has resulted in the stabilisation being witnessed. We will be getting 50 million litres of fuel a week from that deal."

"To cover the gap left by Sakunda, there is the IPG deal, which became operational end of last week where we will be getting about 20 million litres per month. There are also other players, which are giving us their facilities for example Engen and Total have also come up with their facilities. The market is liberal and we urge those with similar facilities to come forward and present them to us. We welcome them."

A survey in Harare yesterday showed that queues had disappeared at most service stations and fuel was available.

Experts yesterday said structures like the one sealed with Sakunda will give Government ample time to rebuild its export receivables over the next 18 months and cover the loans.

They said the intervention by Trafigura also showed the confidence the international community had in Zimbabwe in terms of debt repayment.

According to documents in our possession, Government will only pay for the 100 million litres provided by Sakunda and Trafigura upfront after a year. When its starts repaying the loan, Government will be parting with $5 million a week and this means the repayment period will stretch for 20 weeks.

Documents show that on the 1,6 billion litres to be supplied over 18 months, Government will avail foreign currency to Trafigura for 50 percent of what the international company would have sold into the market. The balance will be paid after the consumption period.

On all the structures, Sakunda will be servicing its own customers as agreed to with Government and allows other oil marketing companies to come in. Dr Gumbo appealed to the public not to hoard fuel.

"Prices have remained the same and no one should charge in US dollars. We are grateful for the intervention that has come from fuel companies. It is something that has taken away pressure from Government and provided relief to our people, the industry, mining, agriculture and other users of this precious liquid," he said.