Fuel crisis — Mangudya puts blame on indiscipline

Mugove Tafirenyika

RESERVE Bank of Zimbabwe governor John Mangudya says the country is importing adequate fuel not to warrant shortages, but there is indiscipline in the oil sector, the Daily News reports.

This comes at a time motorists are spending hours in fuel queues across the country.
Appearing before the parliamentary portfolio committee on Energy yesterday, Mangudya bemoaned the continued sight of long winding queues at service stations across the country despite the fact 1,5 billion litres of fuel is imported per year on average.
Attributing the continued shortages of fuel to indiscipline in the fuel industry, Mangudya told Parliament that government was working on the introduction of fuel smart cards.
“There is nothing that has really changed in the economy that could possibly result in increased fuel consumption. One asks where the fuel is going.
“It certainly is not a question of supply and demand. Even if we were to put 200 million litres in the market, it would still disappear and nobody knows where it goes.
“Without evidence, I can only suspect that it is either the retailers or the oil manufacturing companies or both. There certainly is an invisible hand,” Mangudya said.
“We have suggested that we should probably introduce fuel smart cards to control the use of fuel. An individual will swipe for the fuel that he or she uses.
“If the car is not registered or if it is not roadworthy, it cannot get fuel. We have realised that all that is going on is beyond arbitrage and we cannot continue like this. We will have a pilot project for this proposal at the end of this month.”
The RBZ chief said between January and May, the country imported 117 million, 116 million, 143 million, 74 million and 103 million litres of fuel each month respectively on an average of 40 percent petrol and 60 percent diesel.
The Elias Musakwa-chaired committee also heard from Indigenous Petroleum Association of Zimbabwe (IPAZ) chairperson Aaron Chinhara that some of the fuel was being diverted to the black market because it was being distributed to retailers unfairly.
“We last had letters of credit for fuel in March. Since then only Glow Petroleum out of the 77 members of our association has been getting an allocation from NOIC. The problem is that some service stations are allocated more than their capacity and they end up selling the rest to others.
“Glow, for example, which gets $6 million worth of letters of credit is way bigger than Engen which gets $25 million.
“The fuel that our members have been selling since 14 March is what they buy from other retailers who get beyond their capacities,” Chinhara said.
He also bemoaned the high fees of transporting fuel using pipeline which he said costs eight cents per 35 000 litres from Mozambique “making it the most expensive in the world”.
Major fuel retailers in the country, including Engen, Zuva Petroleum, Total, Petrotrade and others, told the committee they were operating at between 40 and 50 percent capacity owing to foreign currency shortages.
On the other hand Zimbabwe Energy Regulating Authority (Zera) acting chief executive officer Eddington Mazambani said plans were at an advanced stage to introduce fuel marking as a way to tighten the screws on unscrupulous retailers.
“We are worried that there are people who are selling fuel in foreign currency even when they get it structured in RBZ RTGS Letters of Credit.
“We are going to be demanding documentary proof that if you are selling in forex, the whole value chain is in US$.
“We expect to get results by next week. We are starting with Harare because if we instil discipline here, it will be a good starting point. We are going to withdraw licences for failure to comply,” Mazambani said.
Zera also admitted it remained unclear how the commodity was being funnelled away from registered dealers into the hands of roadside traders.
Zimbabwe has faced fuel shortages for nearly two years now, against the backdrop of limited foreign currency for imports, spawning a thriving US dollar parallel market that has led to diversion of the commodity from the formal market where it was mostly sold in local currency at low prices.
  1. Mr W D.Zvinavashe says

    Mr Governor if I was the President of Zimbabwe. The amount pressure being given to opposition part was going to be in youse and the RBZ.Infact the whole system is dead.with your team you have destroyed Zimbabwe more than sanctions you claiming every day.i dont know why you guys you are still free you must be in jail for economically ,fanatical injustice to the nation of Zimbabwe. DEAD WOOD

  2. george says

    Please do not shame Zimbabwe. Are we saying we cannot track millions of litres of fuel where these are going to in a country with police force intelligence officers. No no Mr Mangudya find another story. Police in this country can track a stolen cellphone and find it now you tell the nation we do not know where millions of litres of fuel are disappearing to. Oh no.

  3. Ken Sharpe says

    this a dilemma for a “dr” (with an economic doctorate degree from an unregistered university) Mangudya to address, isn’t it? The price of fuel in Zimbabwe at zwl 25 and the rate of exchange between usd and zwl is currently 75. This makes it a liter of fuel worth USD 0.33. In all regional countries, the same 1 liter of fuel is sold for USD 0.90. For as long as the rate of FX is fixed at some illusionary rate the economy will be suffocating, masses will be suffering and Zanu elite will continue robbing the public blind.

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