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Currency reforms expected to stabilise fuel sector

by Staff reporter
09 Jul 2019 at 07:23hrs | Views
THE re-introduction of the Zimbabwean dollar is expected to bring stability to the fuel sector as Government tightens fiscal and monetary policies to ease pressure on foreign currency demand, National Oil Infrastructure Company of Zimbabwe (NOIC) board chairman, Engineer Daniel Mackenzie-Ncube, has said.

Government recently ditched the multi-currency system and adopted the Zimbabwean dollar as the sole legal tender for domestic transactions.

The move has already started bearing fruit with a drastic drop in foreign currency exchange rates and businesses now working on reducing prices.

"The move by Government to ban the multi-currency system is such that the interbank rate falls to about 4 or 5, that advantage has to be translated into goods and services, fuel included. "The move might also bring prices of fuel down," said Eng Mackenzie Ncube.

"The most important thing is that the black market rate and the interbank market rate are almost similar.

"The incentive of selling fuel on the black market has been curtailed because of the currency reforms as initiated by the Ministry of Finance. That has assisted us a great deal."

He said NOIC was working hand in hand with the Reserve Bank of Zimbabwe to unlock funding for more fuel to be brought into the country.

"We are working with the RBZ to open up other lines of credit which will enable us to acquire fuel that satisfies the market in the not too distant future," said Eng Mackenzie-Ncube.

He said more ethanol would be transported from Chiredzi for blending purposes.

Eng Mackenzie–Ncube also said Government through the Zimbabwe Energy Regulatory Authority was working flat out to address concerns of indiscipline within the fuel sector.

"When we came in there was concern about of indiscipline among the fuel dealers and Zera and their parent ministry are seized with all that.

"People were not dispensing all the fuel and it would find its way to the black market.

"I am sure Government is working to address that and I am sure the fuel situation will be back to normal," he said.

Last week, Energy and Power Development Minister Fortune Chasi said players in the fuel industry had made proposals that he was still considering to address the leakages. He said Government wanted to understand the movement of fuel from the time it gets into the country up to the time it is sold at service stations.

Some players in the sector have been accused of accessing foreign currency on the interbank market but divert the commodity to the black market. With regards to liquefied gas, Minister Chasi said he had last week engaged players in the sector to discuss ways of regulating the industry.

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Source - chronicle

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