HomeBusiness DigestGono blames fuel crisis on 'looters'

Gono blames fuel crisis on ‘looters’

RESERVE Bank of Zimbabwe governor Gideon Gono has blamed severe fuel shortages on petroleum companies, saying they had looted millions of dollars in foreign cash.

>Gono told a monetary policy audience in Harare yesterday that Zimbabwe’s 120-odd fuel companies had contributed to the parlous fuel supply situation.

Since last year, priority has been given to fuel procurement, with US$413 million of auction funds going towards imports. Already, US$111,1 million has been spent on fuel this year alone, he added.

Both the National Oil Company of Zimbabwe (Noczim) and private players benefited from the funds.

Gono however said the RBZ had detected patterns of fuel-fund abuse, with as many as 15 petroleum companies failing to account for US$12,4 million worth of fuel money.

He said his team had to battle for a month to get an explanation from the accused parties.

“In other cases, which are still pending, some members of the Indigenous Petroleum Marketers of Zimbabwe (IPMZ) have failed to account for between US$5-7,5 million worth of fuel since October 2004,” the central bank boss said.

IPMZ has since merged with another fuel procurement agency to form the Petroleum Marketers of Zimbabwe (PMZ), which Gono wants dismantled on corruption charges.

The RBZ, Gono averred, had noted that money allocated to the former IPMZ members had been passed on to “external companies that have since filed for liquidation” in their backyards.

PMZ had almost similar problems, but it was putting its act together, the governor added.

Of the money allocated to fuel players last year, private oil firms took US$217,1 million, while Noczim accounted for US$155,7 million. Additional funds were also provided on an ad-hoc basis.

Although Gono did not specify the RBZ and government’s course of action on offenders or culprits, he called for an immediate reduction of the number of licensed fuel importers.

“The number of companies… expect(ing) foreign exchange allocation from the limited Reserve Bank pool, extends to more than 120.

“This number is, in our view, excessive to optimal requirements for players in this market and we urge the responsible authorities to withdraw some of these licenses,” Gono said, adding there should be no more than 20 operators in Zimbabwe.

His call for amalgamations ties in with proposals made by other industry players earlier this year, although the initiative suffered a stillbirth due to entrenched political interests.

Zimbabwe, requiring US$40 million worth of fuel monthly, descended into an unprecedented shortage this week, as retailers allegedly withheld stocks in anticipation for a pump-price adjustment.

Petrol and diesel average $3 600 a litre, although the latest bout of problems is symptomatic of a deep-seated six-year hard cash crunch and policy shortcomings.

Information obtained from the RBZ shows that Zimbabwe has the cheapest fuel in the region. (See table). Gono yesterday said producers should take advantage of the cheap fuel to produce.

“…We are highly subsidising our producers to levels where they should be producing more competitively for exports,” he said.

The shortages have refreshed ugly memories of transport blues, dating back to 1999.

Meanwhile, the RBZ says about US$92,4 million was allocated to the Zimbabwe Electricity Supply Authority (Zesa) last year for power imports and debt payments.

Gono said Zesa has been weaned-off the forex auction system and has been getting nearly US$7,7 million in monthly allotments. The figure is, however, US$10 million short of the power utility’s needs for imports from the region.

The governor said Zesa had obtained US$23,7 million this year alone, although this money falls short of national requirements that has forced the country to ration once again.

The power outages have negatively impacted on industry to an extent that it has cut back on working hours, taking a toll on Zimbabwe’s already shrinking economy. — Staff Writer.

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