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
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
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.
Source: Business Times