PETROTRADE’S acting Chief Executive Officer, Godfrey Ncube, has called on the Government to liberate the procurement and selling of fuel in order to address the current fuel crisis.
Ncube said this when he appeared before the parliamentary portfolio committee for Energy and Power Development yesterday. “Now that I am running a Government company and I am interacting with stakeholders in the sector, where we are at the moment, I think it would be ideal, but painful that maybe the controls that are in the sector, especially the prices, are opened and the companies are allowed to sell at any price without the controls, that would eliminate the queues.
“That, however, is a difficult thing for the Government to do because it would mean that very few people would access the fuel I think that’s what we can do because as long as we cannot source enough foreign currency it means that, if the Government liberalises the sector, starting with the procurement; allowing companies to source their own foreign currency and sell at whatever price they want to sell,” he said.
When Ncube was asked how much fuel they had in the country, he told the committee that as of yesterday, Petrotrade was dry of diesel and only had 250 000 litres of Petrol.
“As of today, we have a problem, we haven’t received anything yet. As for now, I only have 250 000 litres of petrol that we are in the process of distributing,” he said.
Ncube, in his presentation, also spoke about the quantities of fuel procured in the six months of 2020, in comparison to the litres procured in the last six months of 2019.
“In terms of the totals, if we compare what we bought in 2019 to what we distributed in 2020 you will find that there is less by 27 percent.
In 2020, for the past six months, we managed to buy and distribute 36 million litres of fuel, combined product, whereas in the first quarter of 2019 we distributed 50 million litres. “This is an indication that there is a challenge as far as the distribution of fuel is concerned,” he explained.
Ncube also elaborated on service station and distribution modalities. He said Petrotrade has limited infrastructure and some sites are rented from individuals and in some cases they use dealers to distribute their fuel. “Transport is adequate to distribute fuel through-out the country, although in certain areas roads are a challenge. Both outsourced and in-house transport is used to distribute our product.
When there are fuel shortages like what we have now, we have supplies scheduling for all sites to have a turn. In as far as volumes are concerned, we have reduced to maybe 10 000 litres per site per product,” he said.
Petrotrade is a trading company wholly owned by the Government and is responsible for downstream activities, including the selling of petroleum products and lubricants through bulk sales and service stations.
Ncube explained how the oil industry works. The oil industry structure, in general, consists of oil traders who bring fuel into the country on bond notes, and that’s what we consider as our upstream.
Then the traders who bring fuel in USD to local oil companies through long term contracts. “I want to emphasise US dollars because fuel is traded in US dollars.
In turn, companies distribute fuel in local currency through service stations or through bulk sales. Service station networks consist of sites owned by oil companies and those owned by private individuals, which then can be used as dealers.
“Dealers depend on oil dealers for their supplies to distribute or sell to end-users. Distribution mechanisms consist of pump sales, the card systems, pre-payment and coupon,” he concluded.
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