Government is sitting on several independent fuel pipeline proposals as investors seek to cash in on Zimbabwe’s petrol and diesel shortage.
Energy and Power Development Minister Jorum Gumbo this afternoon told the media the rush on pipelines is premised on the misinformed notion that the country’s fuel shortages are a result of pipeline constraints.
Instead, Zimbabwe suffers from an acute foreign currency shortage that has even scuttled extension of tenure on two fuel supply facilities with Trafigura Beheer and Independent Petroleum Group.
Trafigura and IPG late 2018 sealed a deal to extend payment periods for fuel supplies to Zimbabwe from 30 days to as much as 180 days, but Gumbo said the new arrangement could not take off due to foreign currency shortages.
“We have negotiated with Trafigura and IPG, those facilities are still standing (but) we have had a problem of foreign currency shortages. When the facilities were running, the demand also shot and it would not match…the facilities are still on, they have not been revoked. IPG continues to supply us, Trafigura also,” Gumbo said, adding the two supply the country with about 32 million litres of fuel per week.
Other companies – Engen, Total, Praise Petroleum and Strauss Logistics-are also supplying Zimbabwe with about 13 million litres of fuel per week.
Gumbo said fuel supply remained adequate in Zimbabwe despite instances of an artificial rise in demand due to panic buying and low prices in hard currency terms.
Under the currency arrangement, fuel is top of the import priority list.
Currently suppliers pump fuel to inland depots at Feruka and Msasa where it is held in bond. The companies then get foreign currency to pay for the fuel from the central bank before the liquid is released for sale on pumps.
He said when government announces that supplies are adequate, it will be referring to fuel under bond and not necessarily at service stations.
Gumbo also said the national pipeline is run by NOIC.