Fuelgate: Why Zimbabwe is in a Fuel Crisis

Harare – Is the country being haunted by Rotina Mavhunga’s ghost? Or, smuggling has become more sophisticated.

For the record, Mavhunga a traditional healer, summoned cabinet ministers in 2007, claiming a rock in Chinhoyi oozed with diesel, which could meet the country’s entire needs.

The contingent included Kembo Mohadi – now vice president.

According to the Herald, Zimbabwe consumed almost 480 million more litres of petrol and diesel in six months between June and November last year than in the same period in 2017.

This is a 77 percent extra, at an additional foreign currency cost of more than US$200 million. It is not known as of now who used the extra fuel and for what.

But between June and November consumption rose exponentially each month with diesel peaking in October at 109 percent of the October 2017 level and petrol in September hitting 126 percent of the 2017 level.
A Woman who Claimed to have Discovered Diesel in Zimbabwe in 2007

Consumption then started dropping sharply and by November both fuels were around 38 percent above 2017 levels.

Diesel consumption was 71 percent higher in the six months, June to November overall, while petrol was 86 percent. Generally, fuel consumption in an economy, especially over a short period like a year, should mirror economic growth.

An increase in the GDP of 5 percent should be matched by an increase in fuel consumption of 5 percent, economists say. Other factors can make the growth in fuel use higher or lower than economic growth.

The election last July would have had an effect, but not in the hundreds of millions of litres. The May figures for 2017 and 2018 are close, while the climb in June and July for diesel was below the peak consumption although petrol did have a spike in July.

But analysts said an extra 130 million litres in July could not be explained by the election. This would imply that every man, woman and child in Zimbabwe each drove 100km on election business.

Enter fuel smugglers.

There were suggestions that Zimbabwean fuel was being smuggled over borders by dealers wanting to acquire foreign currency.

In exchange, the aces forex, using it to buy the fuel in the first place, and to take advantage of arbitraging between regional fuel prices.

Suggestions of fuel deposits discovered in Zimbabwe are yet to made official by experts.

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