Fri Oct 21 22:24:55 CAT 2016

Zimbabwe rocked by sudden fuel shortage

By Moses Mudzwiti | Jul 08, 2009 | COMMENTS [ 0 ]

ZIMBABWE has been rocked by a sudden fuel shortage that has seen petrol prices skyrocket to as much as R15 a litre.

In the capital Harare some service stations had run completely dry while other operators hiked their prices in response to growing demand.

Adding to demand is the erratic electricity supplies, with more and more Zimbabweans now relying on fuel-powered generators.

The strengthening of the rand against the US dollar is also said to have exacerbated the problem for small-budget fuel importers.

Zimbabwe's fuel importers prefer doing business in US dollars, which are now fetching less. But some economists point to the massive tax on imported fuel as a contributing factor. About 15 percent of the selling price of fuel has to be handed over to the central bank.

Zimbabwe consumes about 1,2million litres of fuel (diesel and petrol) a day.

And as a means of raising hard currency, fuel importers are now insisting on trading in coupons rather than cash. The coupon system is favoured by suppliers because it forces consumers to pay in advance.

Rising fuel costs have immediately translated into higher transport and food prices.

While shops are well-stocked, the price of goods is on the rise, with most unable to afford to buy enough food. This exacerbates a situation in which two thirds of Zimbabwe's population is in dire need of food aid.


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