Fuel prices go haywire

Fuel prices in Bulawayo and surrounding areas have gone haywire. Petrol is selling for anything between $150 000 and $160 000 a litre in Bulawayo while in Gwanda it was going for $220 000 a litre.

It is not clear why the price has suddenly shot up because the towns are very close to the major sources, South Africa and Botswana. Bulawayo is only 120 km from Botswana.

The prices rocketed soon after central bank governor Gideon Gono’s monetary policy statement last week indicating that people were probably taking advantage after realising that Gono had no solution to the nearly year-long crisis.

The price of petrol is still pegged at $22 800 a litre, a price which Gono said was unrealistic. The National Oil Company of Zimbabwe (NOCZIM) had incurred losses of over $1 trillion.

Gono said this would “ultimately be funded by all Zimbabweans through costly printing of money to balance the fiscus”.

He also said that there was critical need to realign the fuel price to curb the blackmarket as only a selected few had access to this “cheap” fuel.

“..The current arrangements in the fuel sector, under which a privileged few access fuel at subsidized prices is fomenting immense leakages, where recipients of the subsidized fuel are tempted to make quick gains through the disposal of same in parallel markets…” Gono said.

Ironically while the government insists on selling fuel at unrealistic prices, NOCZIM is failing to provide fuel to selected service stations that sell it in foreign currency at US$1 a litre.

It is now cheaper to buy the fuel in foreign currency as the US dollar is currently selling for $130 000 on the parallel market. The pound is going for $200 000 while the pula is pegged at $30 000 and the rand at $26 000.

The US dollar was trading at $99 201.58, the pound at $177 223.62, the pula at $18 763.98 and the rand at $16 586.12 on the interbank market on Tuesday, clearly indicating that there is a high demand for the pula and rand.

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