Fuel Crisis: RBZ Increase Forex to $85 Million Monthly

Harare - The Reserve Bank of Zimbabwe (RBZ) has increased foreign currency allocations for fuel to about $85 million per month, starting mid this month.

The increment is about 50 percent compared to earlier months, has been necessitated by challenges experienced by motorists and industrialists in accessing fuel in the past few weeks. International prices of oil has increased.

RBZ Governor Dr John Mangudya told the media that they had increased foreign currency allocations for fuel to ensure the commodity is readily available.

“We have increased (monthly allocations for fuel per month) to between $80 and $85 million (from) mid-May 2018,” said Dr Mangudya.
Fuel Shortage in Zimbabwe

The move by the RBZ comes at a time when Government is pressing ahead with efforts to guarantee uninterrupted supplies of petrol and diesel in the country.

Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe conceded this week that fuel consumption had increased in the country, warranting an increase in foreign currency allocations for imports.

“There has been an increase in the consumption of fuel. We now need to increase our budget on fuel but it’s going to put pressure on the demand for foreign currency.

“Fuel demands more foreign currency than any other commodity and that is my biggest worry. We will require an increase in exports to overcome that (foreign currency shortages),” said Mr Jabangwe.

Zimbabwe now has a huge vehicle population of up to 1,8 million while new factories have been opened, existing ones have ramped up production causing a surge in demand for fuel.

Fuel and electricity are high priorities in terms as of foreign currency allocations in the country given their centrality to Government’s industrialisation agenda.

The RBZ has previously indicated that it allocates about $20 million to Zesa so that it imports power from South Africa’s Eskom and Mozambique’s Hidroelectrica de Cahora Bassa (HCB). Zimbabwe imports about 300MW from Eskom and HCB to augment local generation.

Fuel prices have been trekking upwards in recent weeks to $1,41c in response to rising international prices, which rose to about $80 per barrel last week due to geopolitical tensions in the Middle East, and attempts by Oil Producing and Exporting Countries (Opec) to reduce supply and force a price increase.

However, oil prices had retreated to $67,48c per barrel by yesterday afternoon. Patrick Pouyanne, CEO of France-based oil firm Total, last week hinted that international oil prices might hit $100 by year-end.

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