Fuel consumption falls sharply

BY FIDELITY MHLANGA

ZIMBABWE’S fuel consumption declined significantly during the first quarter of this year, as the market responded to a second hard lockdown rolled by the government to fight Covid-19, which entered its second year uninterrupted, Zimbabwe Energy Regulatory Authority (Zera) data showed this week.

The data showed diesel uptake took the biggest battering, nose-diving by 23,4 % to 163 million litres during the period, from 212,86 million litres during the same period in 2020.

Petrol consumption declined by 12,53 % to 104,73 million litres, from 119,74 million litres previously, the data indicated.

Most businesses were shut down during the period, except for a few companies that were classified as essential services.

The lockdowns have been lifted and several firms are now running. But Zera officials say even under the new circumstances, consumption remains subdued, as there still remain some measured restrictions to movement.

“Last year’s Covid -19 lockdown kicked in on the first of April. So it means during the first three months of last year there was no consumption disruption,” Zera chairman David Madzikanda said.

“This year, as we speak, we are still experiencing restrictions and industry has not returned to normalcy,” Madzikanda said.

The data showed that diesel consumption for January this year was 62,17 million litres, down from 68,3 million litres last year while diesel consumption also eased.

In March this year, diesel usage declined to 55,5 million litres from 76,2 million litres during the same period last year.

The slowdown in uptake was experienced across the first quarter. Fuel importers have been allowed to utilise free funds to ship products into Zimbabwe. Previously, they solely relied on the central bank to release foreign currency before importing.

Last month Zera announced fuel price increases, which saw Diesel 50 going up from ZW$105,56 to ZW$111,77 per litre, while petrol prices increased by ZW$8,14 to ZW$112,96 per litre.

But there has been a backlash from consumers who have queried why the country had the most expensive product in the region.

Madzikanda said the current price was 44% above the regional average due to costs associated with taxes.

“In the region the average price is US$0,94 per litre if you remove the tax and duty component,” he said.

“Our fuel is just as competitive. In other words there are no inefficiencies in Zera. If you add the taxes and duties our fuel becomes 44% expensive relative to the region. The difference is primarily on taxes and duties which is an issue that we obviously raised with the government because it has implications on competitiveness of industry,” he said.