Chronicle Editor
WE welcome Government’s decision to liberalise the fuel sector by allowing holders of free funds to import fuel to augment current supplies. We feel the decision is not only logical but will lessen the burden on the Government and the Reserve Bank of Zimbabwe which is battling to meet demand for scarce foreign currency among the country’s strategic sectors.
Of late there has been a resurgence of fuel queues with erratic supplies being blamed for the current shortages. Government says there are logistical issues to do with the recently announced Monetary Policy Statement that are causing the current irregular supplies and these will be addressed this week with supplies expected to stabilise.
However, despite raising the price of both petrol and diesel from $1,32 and $1,24 per litre to $3,31 and $3,11 respectively, the supply of fuel has not stabilised with forex shortages being cited. Clearly, the RBZ is overwhelmed with competing demands on the little foreign currency in its reserves. These range from electricity imports, medicines, water chemicals, fuel and cooking oil.
Intermittent stock-outs of fuel are pegging back the country in terms of productive hours lost as people spend hours in long winding queues. Production in companies is also affected as fleet and machinery are grounded. By liberalising the importation of fuel, Government is sharing the burden of bringing the essential commodity into the country with entities that have the capability to do so. The beauty of liberalisation is that it will allow for smooth operations in big conglomerates, mining houses and other companies while allowing Government to cater for individuals and other small businesses.
The Permanent secretary in the Ministry of Energy and Power Development, Engineer Gloria Magombo, told our sister paper, The Sunday Mail, that Government is working on a new set of regulations that will allow holders of free funds to import fuel. “This is something that is being considered and we should be making an announcement soon,” said Eng Magombo. We are still looking at the modalities; that is the process of how that (deregulating fuel importation) can be done.
“Obviously we already have licensed operators who we think will have to lead the process of procurement. We will be looking at allowing, for example, mining companies who have their own foreign currency and need fuel for their operations.
“I think it’s an issue Government wants to open up and see what are the opportunities for synergies with those who have free funds to be able to import for own consumption. We are looking at people who want to import for own consumption,” she said.
In particular, Section 29 of the Petroleum Act imposes a penalty of up to five years imprisonment for either procuring, producing or retailing fuel without a licence.
It reads: “No person, other than a petroleum company licensed under this part, shall procure, sell or produce any petroleum product.
“Any person who contravenes subsection (1) shall be guilty of an offence and liable to a fine not exceeding level nine or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.”
Eng Magombo is, however, confident that the current fuel stock-outs will be addressed soon.
“The stock-outs are mainly a logistical issue. Like we have said before, internally we do have stocks. As of this week, more stocks have been released into the market and you will not be seeing queues soon, an intervention has been made.
“We have been going through a transitional period where the MPS (Monetary Policy Statement) has been announced and money for fuel is still being allocated by Government, so we have a logistical issue which we do not expect to persist. We expect to be cleared by the end of this week,” she said.
We sincerely hope the fuel situation will return to normal this week as the current shortages are disruptive to the economy. We also believe that with time and as the economic situation in the country improves, Government will eventually leave the procurement of petroleum products to private players.
Of course, we are cognisant of the fact that complete liberalisation without due diligence could cause a sharp rise in the price of fuel and we are sure Government will tread carefully on this one. In the interim, we are confident that the new set of regulations it is crafting to liberalise the fuel sector will have a positive impact on the supply of the commodity.
Online Reporter