The Reserve Bank of Zimbabwe
ZIMBABWE’S central bank this week intervened to rescue the country from a critical fuel supply crisis by injecting an undisclosed amount of cash for payment to international oil suppliers.
Major fuel dealers said the situation was normalising, with tanker trucks said to have been deployed in the capital and into cities and towns across the country. The situation had deteriorated after the Reserve Bank of Zimbabwe (RBZ) had reportedly reduced foreign currency allocations for payment of fuel imports, resulting in most filling stations running dry.
The central bank had, however, last week claimed to have increased foreign currency allocation for fuel imports from $7 million to $10 million weekly. Fuel and electricity imports are on top of a priority list put in place by the RBZ last year to manage foreign currency allocation. Some petroleum firms blamed the critical shortages on panic, which they said resulted in increased demand. “There was panic buying and this resulted in fuel running out fast,” said an official with Zuva, who said they had enough stocks at their storage facilities to meet demand in “a normal environment”.
“We now have all products at our filling stations in Harare,” said the Zuva official. A representative of Engen said the situation has normalised. A total employee said they had enough stock to meet market demand. “We’re sending trucks everywhere,” she said. An executive with Puma said they were pushing their products into the market after getting foreign currency from the central bank. He said they had run out in the previous week because “foreign currency had not been released” by the central bank.
“We’ve received our allocation and all our service stations have both petrol and diesel,” he said. The fuel shortages had triggered widespread uncertainty on the economy, which is now on a downward trajectory since stabilising in 2009 after the country ditched its ruined currency for a hard currency regime to deal with runaway inflation.
The situation, which worsened in 2008, was accompanied by widespread commodity shortages and a cash crisis that ruined banking sector confidence and agitated a restive population, resulting in an electoral upset against President Robert Mugabe in elections held that year. Over the weekend, the RBZ signed a memorandum of understanding for a $600 million facility from the African Export and Import Bank (Afreximbank), which is expected to ease foreign currency shortages that worsened after the closure of the tobacco selling season in August. Drawdown was said to have started this week, bankers said.
Mangudya said last month that fuel and electricity would be assured under the Afreximbank facility. Fuel topped the import bill during the first half of this year at $376 million, while electricity imports accounted for $121 million during the same period, bringing the total bill for both electricity and fuel imports to $497 million. Demand for fuel has increased over the years due to an influx of privately owned public transport operators, especially commuter omnibuses, to cater for the increased number of people in urban areas following the deregulation of the transport sector, according to an earlier policy statement by the central bank.
Growth in the urban population due to rural-urban migration has put pressure on the urban transport system. The liberalisation of trade has also seen a huge increase in the importation of relatively cheaper and affordable second hand vehicles, particularly from Japan, increasing demand for fuel. — newsdesk@fingaz.co.zw