Zimbabwe News and Internet Radio

Major fuel crisis beckons as forex dries up

By Tatenda Dewa | Harare Bureau |

A devastating fuel shortage is looming amid revelations that banks are failing to process importers’ orders due to a biting shortage of foreign currency in banks.

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Fuel shortages would offset inflationary trends and drive diesel and petrol to the black market, reminiscent of the period from the mid-2000s to 2008.

The Energy and Power Development portfolio secretary, Patson Mbiriri, admitted that export earnings were poor, resulting in shortages of fuel at some service stations.

While he promised that government was working to ensure the disaster is averted, Mbiriri indicated that the Reserve Bank of Zimbabwe (RBZ) has been turning down some bank-approved applications for fuel payments to external suppliers.

“They (oil companies) have been told that there is no foreign currency. There have been challenges related to foreign currency, making it difficult to make payments of fuel imports through their nostro accounts,” said Mbiriri.

“Oil companies would approach their banks and request that payment of so much be made to company A, on the basis of their nostro accounts.The bank would approve, but when it seeks approval from the RBZ, the challenge has been that they would be told that there is no foreign currency.

“It has been the tradition that the Reserve Bank of Zimbabwe prioritises energy and fuel in allocation of hard currency. Of late, oil companies have been failing to access their money for fuel importation, owing to foreign currency shortages, which we are experiencing as a country,” he added.

Zimbabwe, which uses a basket of foreign currencies dominated by the US dollar, is currently going through an acute cash squeeze that has forced banks to drastically reduce withdrawals for both corporates and individuals.

Government is set to introduce bond notes that it insists will help improve exportation and ease foreign currency shortages.

Mbiriri urged people not to hoard fuel. Nehanda Radio