Fuel Crisis Looms As Foreign Currency Shortages Intensify

1 year agoThu, 26 May 2022 18:04:36 GMT
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Fuel Crisis Looms As Foreign Currency Shortages Intensify

A fuel crisis is looming in Zimbabwe as major dealers say they are struggling to stock up because of foreign currency shortages.

Fuel dealers say they may be forced to cease operations as the country is under a foreign currency crisis.

NewsDay Zimbabwe says some of the major fuel players reportedly facing serious challenges are Total, Engen, Puma, Zuva and Glow Petroleum.

The publication was told that the forex shortages are causing delays in making telegraphic transfers (TTs) for fuel purchases.

This has given rise to corruption as smaller fuel players under the Direct Fuel Import (DFI) Group and fuel smugglers are now taking advantage of the situation.

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One chief executive of a major fuel dealer, who refused to be named, said:

We are failing to quickly import fuel because our TTs take forever to get cleared, and the fuel prices keep changing every week. We were struggling when we sold fuel in local currency and had to wait for the Reserve Bank of Zimbabwe to give us foreign currency.

At that time, we went for weeks without fuel, yet we had to pay rent and our staff. That is the reason Caltex, Shell and Mobil left this country. We are in trouble.

Energy ministry secretary Gloria Magombo said her office was investigating the matter. She said:

We would need to understand why there are these frequent stock-outs together with the Zimbabwe Energy Regulatory Authority (ZERA), and thereafter, I can give you a comprehensive report.

The smaller indigenous fuel players under the DFI Group are said to be paying hard cash upfront for supplies.

DFI Group secretary-general Bart Mukucha said fuel supply routes had largely remained normal despite the war in Ukraine. He said:

The Zimbabwe forex auction had no money from the beginning and doesn’t create money. It only allocates the little that’s there. We find money elsewhere and our plan is to get funding from the diaspora. We then convert it to fuel.

He said DFI also had credit lines.

Meanwhile, in its weekly report, the Zimbabwe Coalition on Debt and Development (Zimcodd) said the local currency market for fuel was now extinct as the fuel sector had fully dollarised.

Reports of fuel smuggling have been increasing lately.

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