US$50million facility set aside to meet fuel shortages.
This follows the intervention by Government through availing Letters of Credit (LCs) worth more than US$50 million to Engen Petroleum, Total Zimbabwe, Zuva Energy and Puma Energy. Energy and Power Development Minister, Dr Joram Gumbo said this yesterday while responding to questions from journalists during a post-Cabinet briefing.
The fuel situation is expected to get better in the next few weeks as the country’s top four fuel companies started receiving deliveries from the Msasa depot yesterday. “At least four or five big oil companies have already started picking up fuel,” said Dr Gumbo. He said Total Zimbabwe had LCs of about US$13 million which have matured; Zuva US$12 million and Engen US$25 million. Some small fuel companies were given their usual allocations and cash.
LCs, also known as a documentary credit or letter of undertaking, are a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. A snap survey by our Harare Bureau yesterday revealed that fuel tankers had started delivering fuel to a number of service stations in Harare, a move described by Dr Gumbo as a “good sign”.
Government is optimistic the fuel situation would improve further in the coming weeks. Dr Gumbo said while Government continues to import fuel every week, the country has adequate stocks that will see “our country and economy running”. He said despite foreign currency shortages which occasionally impact on fuel availability, the country will never run dry.
“I want to assure the nation that there is a commitment from the Government to make sure that there is no time that the nation will ever ground to a halt because of fuel shortages. “We keep on doing our best to make sure that there is adequate fuel in the country.
“Our problem, which we normally meet, is because international companies do not allow our local companies to pick the fuel at Msasa and Mabvuku depots before the Letters of Credit reflect in their own countries,” said Dr Gumbo.
He said there was a collective responsibility between him and Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya in terms of procuring fuel. The clarification comes after social media was awash with claims that only the RBZ had been burdened with ensuring the availability of fuel.
“To say there is no collective responsibility is unfounded. I was trying to express in Shona that the office of the RBZ governor, which is seized (together) with the committee that does the allocation of forex each week for fuel companies, had for that particular week not been able to release enough money.
“As I speak right now, the RBZ has been able to release a good amount of money and more oil companies than usual which are Zuva, Engen and Total, among others, have started picking up fuel from Msasa since yesterday which should see a stability in the fuel supply in the country,” said Minister Gumbo.
Meanwhile, Dr Gumbo said Government’s decision to liberalise the foreign currency exchange rate in February has resulted in a decline in fuel consumption.
Consumption of diesel has gone down to about 3 million litres per day while petrol consumption has also declined to about 2 million litres per day. Before that, individuals and companies were gobbling about 4,5 million litres of diesel per day and 3,8 million litres of petrol per day.
Yesterday’s post-Cabinet briefing was chaired by Environment and Tourism and Hospitality Industry Minister, Prisca Mupfumira, who was standing in for Information Publicity and Broadcasting Services, Minister Monica Mutsvangwa.
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