Just when you think the government has finally got it right, then voila, they pull a surprise shocker! Why on earth did they ban the sale of fuel in foreign currency? Were the check and balance correct, or a time bomb was just created.
I have had many conversations with the Finance Minister, Hon Mthuli Ncube, he is a very sharp man who he has a huge task ahead of him and he wants to prove it can be done! But can it?
The minister is fast forwarding many laws using the temporary presidential powers act, the need for urgency is real but I think the confusion is now overwhelming.
Mthuli Ncube recently struck the best chord when he allowed a liberal market, especially on fuel, allowing players to import own fuel and restock under their own management. Meaning he had cut away from the so called Queen Bee. These were just players depending on USD re-stocking from government to refuel.
The system was very porous, there is no way government for sure would confirm that one has really brought in fuel deliveries and has sold to all allocated locations, as we are already in short supply.
It also made more business sense for most players to simply go back to the Reserve bank and claim refueling after paying bond notes, meaning it was even profitable to claim full sales and convert RTGS balance to USD without actually selling anything due to foreign exchange disparities.
Our biggest problem in Zimbabwe is foreign currency. We don’t have it because we import a lot, against our meager exports. This makes us very desperate and vulnerable, especially when we rely mainly on exports.
The country has in the past months witnessed a surge in fuel usage. The country is at the moment consuming 4 million litres of diesel up from 2,5 million litres a week while 3 million litres of petrol is being pumped, up from 1,5 million litres per week. This is an average of 16 million litres of diesel every month and 12 million litres of petrol.
With all this in mind, it boggles the mind why the government banned the sale of petrol in USD and the ultimate use of USD.
Fuel dealers were literally weaned from depending on the government, it’s a huge crippling bill. Supply had greatly improved and many people were willing to pay in USD to fill up their cars.
Strangely, someone in his wisdom thought it was wise to remove this major relief and put the government under pressure once more.
No International fuel dealer would want to pour in fuel to get his payments in RTGS currency which only works in Zimbabwe, even if the government has a repatriation strategy, they do not have enough forex, it’s a risky business.
This is another time bomb ticking. Whoever advised this, knew knows this very well, but we wait and see.