Fuel shortage chokes business


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The shortage of fuel that has paralysed Bulawayo for more than a month is now choking industry and commerce. Several companies that depend on fuel for their operations might be forced to close if the situation is not resolved, the regional manager for Matabeleland of the Zimbabwe National Chamber of Commerce (ZNCC), Cain Mpofu, said this week.

Industry and commerce are worried about the silence by the government on measures that have been put in place to resolve the fuel crisis that has paralysed the country since the March 31 parliamentary elections.

The central bank announced on Tuesday that it had disbursed US$18.5 million to the National Oil Company of Zimbabwe but there was no indication of when this fuel would be available.

There was a report about three weeks ago that the Jewel Bank had secured a loan of US$15 million from the First National Bank of South Africa to buy fuel but this had done little to ease the situation.

Central bank governor Gideon Gono lamented that there were now more than 120 players in the fuel industry, some of whom were abusing the foreign currency allocated for importing fuel. He said fuel importers should be reduced to a maximum of 20.

The central bank, he said, had to battle for a full month with 15 fuel importers that had failed to account for US$12.4 million that had been allocated to them to import fuel.

Some fuel importers had failed to account for between 5 million and 7.5 million litres that they should have imported. Some of the clients the importers are reported to have bought fuel from had since filed for liquidation, Gono said.

Lack of clear direction on when fuel would be available has fuelled the black market with some reports saying petrol was selling for as much as $30 000 a litre in Bulawayo.

Industry and Trade Minister Obert Mpofu met business in Bulawayo on Monday but failed to convince them on how the problem would be resolved. Instead, he insisted that the current shortage of essential commodities was due to hoarding.

Mpofu said he did not believe in this philosophy. He said while some people were probably hoarding essential commodities this was not on as large a scale as authorities put it.

He said it was more plausible to assume businesses were overcharging than hoarding because they would be in to make a quick back.

“Fuel companies cannot hoard fuel in anticipation of a price increase because they get their foreign currency from the central bank,” Mpofu said. “If the central bank is doing its job properly, it knows who it has given money to, it knows when the fuel has been delivered because it is cleared by Zimra, so if the company does not sell the fuel, the central bank has the right to ask where the fuel is.

“Even companies cannot afford to hoard commodities because most of them operate on bank overdrafts. They have to repay the banks or else they are in trouble. Besides, most companies cannot afford to hoard commodities because they will lose the confidence of their customers if they fail to supply. By the same reasoning even the question of sabotage does not come in. People are in business to make money.”

The ZNCC official said the present shortages were genuine. Authorities should address problems causing these shortages instead of burying their heads in the sand by insisting that they were due to hoarding or sabotage.

 

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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