The governor of the Reserve Bank of Zimbabwe John Mangudya yesterday said the current fuel shortages will be calm by the end of the month, regarding the problem to delays in the processing of lines of credit and the lack of working capital by all companies.
He said fuel shortages were not a result of lack of foreign currency, but the long time it takes for lines of credit to be processed, creating space in the supply and distribution of the product on the market after appearing before the Joel Gabbuza- led Parliamentary Portfolio Committee on Energy, with Energy minister Joram Gumbo giving evidence.
He also said in January the government paid $91,9million for 150 million litres and in February $80,6 million was released for $135 million litres, but out of those litres only 104 million litres were delivered for both months, leaving the gap which caused the shortages.
He said what happened was that the capital of oil companies was based on old retail prices, but now that it is real time gross settlement dollar they do not have working capital and fuel dealers do not have enough cash to purchase from the oil suppliers, and what we are seeing are queues caused by lack of cash flows and lines of credit. The US$ rate change meant that service stations were now spending more for their consumers.
Finance Ministry secretary, George Guvamatanga also appeared before the committee to speak on the exercised duty refund to transporters, miners and others in order to curb price increases
Gumbo said the fuel situation in the country has been constrained for a long time following back the pre-July 30 2018 elections where consumption of fuel rose. The consumption in the last two months of January and February has gone down due to the prices of petrol and diesel which changed.