Zimbabwe owes US$200 million to foreign fuel suppliers, making new imports difficult as the companies require cash up front, Energy Minister Fortune Chasi and central bank governor John Mangudya have said.
Zimbabwe is facing a deep energy crisis due to worsening foreign currency shortages.
Zimbabwe imports oil from Glencore, Total and Trafigura, Engen and Independent Petroleum Group. The companies still ship fuel to Zimbabwe, but keep it in bonded storage on the outskirts of the capital Harare, and it is only released to oil firms once they have paid in US dollars.
“Fuel queues are an eyesore, we don’t want to see them. The fuel situation is a symptom of a bigger problem in the economy,” Mangudya said as he appeared with Chasi before a Parliamentary Committee on Thursday.
Forex shortages mean local oil companies cannot pay for fuel upfront. This means that RBZ has to send a letter of credit to foreign suppliers, on behalf of local importers, guaranteeing that payment will be made for fuel supplies.
Mangudya said the central bank had in the past two weeks issued US$115 million in letters of credit to oil companies to import 170 million litres of fuel, enough to last just over a month.
At a meeting with oil importers earlier on Thursday, Chasi pledged a range of measures that he said are meant to improve transparency in the industry.
“I also mentioned that I have just completed work on regulations around penalties for misbehaviour and those regulations will be sent to the Attorney-General for examination and finalisation. We expect them to come into force pretty soon. We need order in this industry,” Chasi said.
“I pointed that in order to enhance availability of information to the public, I will be publicising who received what amount of fuel and when, so there is nowhere to hide.
“I also reminded them that their licences will be due for renewal in six months. So when that time comes we will look at the conduct and behaviour of each player and it’s our right as government not to renew licences of entities run by devious people.”
He however said licences would not be arbitrarily withdrawn.