Did Shamu own Exor?

Riot police had to intervene when fuel station attendants at Exor instructed motorists to go and buy coupons to obtain fuel which was in acute short supply at the time.

The angry crowd is said to have yelled that the Zimbabwean station owner should take his fuel and go back to Britain.

A cable released by the United States embassy said the indigenous oil company was reportedly owned by Zimbabwe African National Union-Patriotic Front legislator Webster Shamu.

Most reports at the time said the oil company was owned by another ZANU-PF legislator Saviour Kasukuwere.

Full cable:

Viewing cable 03HARARE1321, Fuel Strategies Amidst The Downward Spiral

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HARARE 001321

SIPDIS

SENSITIVE

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

¶E. O. 12958: N/A

TAGS: ECON ETRD EPET ZI

SUBJECT: Fuel Strategies Amidst The Downward Spiral

REF: Harare 01156

SENSITIVE BUT UNCLASSIFIED — NOT FOR INTERNET POSTING

¶1. (SBU) Summary: As noted reftel, multinational oil

companies remain in limbo as to whether they will be allowed

to sell fuel imported with forex at a viable pump price.

Industry sources report that the National Oil Company of

Zimbabwe (NOCZIM) will continue to bring in heavily

subsidized fuel for “strategic” users — police, army,

health units, etc. — while private motorists are left to

their own devices in a flourishing black market. President

Mugabe is currently in Libya on an official visit, which

comes after months of crippling shortages and amid

widespread speculation that a Libyan fuel deal will solve

the fuel crisis. End summary.

————————————

Multinationals Search for Strategies

————————————

¶2. (SBU) Several sources within the multinationals cite a

recent meeting with the Ministry of Energy, in which an

agreement on financing fuel at a parallel market exchange

rate was “minuted” (but not implemented). According to that

agreement, approved by the Deputy Minister of Energy on

behalf of NOCZIM, forex will be made available to the

multinationals at a parallel market rate, and the fuel thus

purchased may be sold at a floating Zim dollar rate based on

purchase cost. None of this has materialized. One

ChevronTexaco rep reports that his company awaits a “comfort

letter” from the Reserve Bank authorizing a purchase of

forex at the parallel rate (currently 2350:1) rather than

the official rate (55:1, or 824:1 for exporters and

preferred businesses). Due to the constraints of corporate

oversight, reftel, multinationals cannot act without such

formal GOZ authorization.

¶3. (SBU) Some reps from British Petroleum seemed upbeat

about their eventual ability to import under this scenario.

ChevronTexaco reps, on the other hand, cited the continuing

impasse as evidence that there is no political will to

address the situation — at least while the GOZ holds out

hopes for a rumored Libyan intervention. A NOCZIM source

recently reported through the DAO that the GOZ is reluctant

to enter into a two-tiered, subsidized/unsubsidized pricing

system, fearing that the inevitable leakage would make the

black market “uncontrollable.” While the sentiment is

noble, the black market is already the only source of fuel

for many private motorists.

¶4. (SBU) Local press reports trumpeted a recent

breakthrough when they announced that private businesses

could henceforth obtain import licenses to purchase bulk

fuel with forex through multinationals. In reality, this is

merely a form of official repackaging. Private companies —

including the US Embassy and other forex-paying customers —

have long had the ability to import fuel through a

multinational broker. One multinational rep noted that the

only revenue which has passed through his company for the

past month has been for fuel purchased by forex customers.

¶5. (SBU) This same rep indicated that they may convert

several of his company’s established retail outlets to

“forex-based” outlets. Most of the retail stations have

been dry for over a month. The only fuel coming in through

NOCZIM has been minimal allocations for official uses such

as police, army, public transport, etc., yet the empty

retail stations continue to bear all the costs of business:

salaries, rent, utilities, maintenance, security. Switching

even a few of the empty stations to members-only, forex-

based stations would at least recover some of the costs of

operation. Given the prevailing black-market rate for fuel

— anywhere between Z $1,500 and Z $3,000 (US $.64 / $1.27)

per liter — many motorists would welcome a realistic

“market-based” price. The legality of such a move would be

questionable; however, at least one ChevronTexaco forex-

based station has operated locally for several years. If

such a station operates strictly via coupons, and restricts

access only to its members, it may be able to bypass the

official price controls and prove a viable strategy for the

short term.

——————————————— –

Even the Indigenous Operators Playing the Game

——————————————— –

¶6. (SBU) One report which originated from an Embassy-

employed driver concerns Exor, an indigenous oil company

reportedly owned by Zanu-PF MP Webster Shamu. The driver

noticed a fuel tanker unloading, and attempted to join a

growing queue. The station’s attendants began handing out

small slips of paper, instructing the motorists to go buy

fuel coupons — for forex — at a stipulated address, after

which they could return and try to obtain the fuel. The

frustrated crowd became upset, then angry, yelling that the

(Zimbabwean) station owner should “take his fuel and go back

to Britain.” A squad of riot police was finally called in

to disperse the crowd. Another Embassy employee reported

that a different indigenous station is already in the

business of selling fuel only through coupons — but at

least this one accepts the local currency. This employee

stated that “it’s not even a secret, you go buy the coupons

— 20 liters for Z$30,000 — and you can get the fuel. How

else do you think so many cars remain on the roads?”

——-

Comment

——-

¶7. (SBU) All of the oil companies are facing severe

pressures from the continuing shortages, but the

multinationals are constrained even more by their corporate

accountabilities, which prevent them from taking actions

which clearly violate Zimbabwean law. At least one — BP —

has been through a downsizing exercise to shed one-third of

its workforce, including senior managers. Indigenous

companies — which reportedly benefit from preferences in

obtaining supplies from NOCZIM — have an additional moral

flexibility, in that they need not answer to international

codes of conduct. Ultimately, those companies which can

hold out longest will do so, while those which see no

improvement in the future may well dump the local retail

assets and abandon the local market.

¶8. (SBU) Suffering even more than the suppliers, however,

are those at the end of the supply chain. Commuters now

spend hours trying to secure transport to and from work.

Farmers — any who continue to use tractors, fuel-driven

drying sheds, or other mechanized equipment — have been

ground to a halt. Businesses dependent upon diesel

machinery, transport or delivery services face spiraling

costs in doing business. Some relief will be generated for

businesses who have access to forex and who can import their

own fuel through the multinationals. However, this will

drive consumer costs even higher, and will widen the growing

gap between those businesses that can ride out the storm and

those that cannot.

Sullivan

(48 VIEWS)