Energy

Fuel consumption down 40%

LIVINGSTONE MARUFU


Zimbabwe’s fuel consumption dropped 40% to 150m litres during the 44 days of lockdown due to restrictions by authorities to combat the spread of the coronavirus pandemic.


Prior to the lockdown stipulations, Zimbabwe consumed a total of
4m litres daily with petrol figures standing at 1.5m litres and diesel at
2.5m litres.


However, with limited movements in and out of cities, the consumption
went extremely down with fuel available at almost every service
station. Reserve Bank of Zimbabwe (RBZ) governor John Mangudya
told Business Times that the central bank continues to import daily fuel
requirements despite the drop in use over the past weeks.


“As the central bank, we have imported the required amount of fuel
but the fact that most people are still under lockdown and are restricted to
movements; fuel consumption has gone down by 40% in the last month.
As you can notice there are very few queues if not nothing at all as very
few businesses are not operating at full throttle, as some staffers are still
at lockdown,” Mangudya said.


This week, the Business Times observed that the commodity is
now in short supply in some parts of Harare as long winding queues
reemerge after government eased the lockdown restrictions nearly a
fortnight ago.
It is estimated that from around 154m litres imported, close to 100m
litres were consumed.
Mangudya, however, said there is a likelihood of less consumption of fuel
due to disruptions in the economy caused by effects of coronavirus to the
global economy.


The fuel crisis has stalked Zimbabwe for the past four years, making it difficult for companies to be productive.
The economy requires around US$100m which translates to at least
US$1.2bn to import fuel yearly.
The RBZ said Zimbabwe has no significant lines of credit to get the
US$1.2bn but depends on gold, tobacco and platinum exports to
import fuel and other critical raw materials.


Mangudya said 100% forex retention threshold could never be
achieved as long as the country will need forex to import fuel.
Zimbabwe which has been allocating foreign currency to fuel
companies for over a decade, weaned them off by letting petroleum
companies seek their forex from the interbank platform.
However, due to ineffectiveness of the platform and critical forex
shortages in the economy, RBZ continues to supply funds to them.
RBZ has been issuing letters of credit, processed through local banks
and guaranteed by the Afreximbank to ensure imports of the precious
commodity.


Given the country’s total imports of US$4.8bn, fuel sector alone is
contributing over 25% of that money.
Daily consumption of both diesel and petrol in Zimbabwe rose
by 342% and 650% respectively between April and October 2018

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