The Zimbabwean government has injected more foreign currency for the procurement of fuel so as to address the growing demand and fuel shortages.
Minister of Energy and Power Development Joram Gumbo stated that the allocation of funds, to petroleum companies for procurement of the commodity to is going to increase with about 35 million from last weeks 17 million as the demand for fuel continues to grow.
According to information provided by the minister, 4 million litres of diesel are being consumed from 2, 5 million litres a week while 3 million litres of petrol against 1,5 million litres per week. The Increase in fuel demand has been exacerbated by panic buying by Zimbabweans and the black market.
Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe admitted last week that fuel consumption had passed the normal threshold in the country, which has caused an increase in foreign currency allocations for imports.
“There has been an increase in the consumption of fuel. We now need to increase our budget on fuel but it’s going to put pressure on the demand for foreign currency”.
“Fuel demands more foreign currency than any other commodity and that is my biggest worry. We will require an increase in exports to overcome that (foreign currency shortages),” said Mr Jabangwe.
According to information given by the Reserve Bank of Zimbabwe (RBZ) foreign currency allocated for fuel purchase was 132,9 million last week which has leaped to 164,2 million. The country’s central bank has said that the oil prices on the world market had also affected the ease of access for fuel since the prices of crude oil had gone up. RBZ’s weekly allocation to petroleum companies for procurement of the commodity will increase to about $35 million per week.
Dr Joram Gumbo alluded that the increase in the demand of fuel is a result of the Zimbabwe is open for business mantra which has spanned business activity in the country. The statement by the minister only seems to be pro government which is only to give an impression the government is on the right trajectory.
On October 1, Minister of Finance Mthuli Ncube announced two reforms which have been attributed to be the cause of the current economic meltdown, reminiscent of the hyper inflationary environment of 2008. One of the measures was the 2% increment to be charged on the value of electronic payments and secondly was the divisions of bank accounts into two separate accounts for foreign currency (USD) account and Bond Notes account.
Amid fears that the country is reverting back to the 2008 economic depression as long queues of petrol and empty shelves have triggered panic buying by Zimbabweans which has fueled shortages. The government last week blamed fuel shortages on foreign currency shortages which the country has been struggling to acquire.
The country has been witnessing long, winding queues at fuel service stations as there has been increases in the demand of fuel. and the monetary measures taken by the Mthuli Ncube have been been attributed to the current shortages of fuel and the economic meltdown.