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Fuel rationing on the cards

GOVERNMENT is considering rationing fuel as a measure to curb fuel shortages following a 60% increase in demand for the liquid at a time the country is hard pressed for foreign currency to pay for fuel imports.

BY TATIRA ZWINOIRA

Zimbabwe Energy Regulatory Authority (Zera) acting chief executive Eddington Mazambani told Parliament’s Committee on Energy and Power Development that demand for fuel was significantly higher.

Demand for petrol is estimated to have increased 69% to an average of 2,06 million litres a day compared to 1,21 million litres in 2017. Diesel on the other hand had surged by an estimated 54,1% to 3,21 million litres from 2,08 million litres in the previous year.

“We might have to consider as a country that we do not have the product (fuel) so maybe let us ration the product. It is not a desirable solution, but with the situation we have at the moment to try and have a demand side management we might actually have to do a paper to recommend rationing unless the situation improves,” he said
“At the beginning of the year, we were averaging on a daily basis about two million litres (diesel) per day which now has moved to above four million litres per day as of October. For petrol, we started in January at 1,6 million litres per day. It has since moved to about three million litres a day. So, there is definitely an increase in the consumption of fuel probably occasioned by the vehicular traffic on the roads”.

Mazambani said fuel operators had stocks being bonded but would need forex for them to be availed and distributed to the market.

Imports for diesel are projected to reach 1,1 billion litres by year end and 751,3 million litres for petrol, an estimated 53,67% and 68,81% increase respectively.

Reserve Bank of Zimbabwe governor John Mangudya, who also appeared before the same committee said there would be enough fuel for the holiday season and beyond.

“We have put in place a number of fuel financial facilities to ensure that Zimbabwe’s supply of fuel is sustainable and stable. We have put in place long term financial facilities which we have put in place for the major oil companies to use, the suppliers to use so that they can supply fuel in Zimbabwe,” he said.

Mangudya said there were six fuel financial facilities in place totalling $197,2 million. These include a $40 million facility for 14 million litres a week with Trafigura and a $32,2 million facility for Total from the United Kingdom-based investment firm Gemcorp to supply between seven and 10 million litres a week running until November 2020.

Others include a $25 million facility to supply seven million litres of fuel a week which is continuous for Engen, a $40 million facility to supply seven million litres a week for Zuva from United Kingdom-based Glencore, a $40 million running facility to also supply seven million litres a week from the Independent Petroleum Group headquartered in Kuwait, and a $15 million to $20 million facility that will supply 3,5 million to five million litres a week for the government parastatal, Petrotrade.

Source: Newsday

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