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Minister claims social media to blame for fuel price hikes in Zimbabwe… RBZ governor agrees

BY VENERANDA LANGA | NewsDay |

ENERGY minister Fortune Chasi and Reserve Bank governor John Mangudya yesterday blamed the social media for spreading false narratives about the fuel situation, resulting in panic-buying and contributing to rises in prices of basic commodities.

Energy and Power Development Minister Fortune Chasi
Energy and Power Development Minister Fortune Chasi

Chasi and Mangudya made the remarks when they appeared before the Parliamentary Portfolio Committee on Energy chaired by Gabbuza Joel Gabuza.

Chasi said there was now need for self-regulation of the petroleum industry and also blamed shortages of fuel at service stations to corruption, where the product is sold to friends only.

Mangudya said in South Africa, fuel only costs US$1,05, Zambia US$1,07 and in Zimbabwe, using the interbank market rates, it is $1 or $0,94, adding that the plan now was to gazette service stations which would be allowed to sell fuel in foreign currency.

Chasi said in order to come up with a solution to the fuel problem, it needs a concerted effort by everyone, including policy measures, as well as to deal with cartels that want to profiteer at the expense of the motoring public.

“We are going to launch an investigation regarding transactions at fuel depots, misbehaviour and favouritism at service stations, where some people receive large amounts of fuel when there is a long queue and then it (gets) finished (quickly),” he said.

“We have seen all sorts of stories on social media and a lot of irresponsible behaviour by people, where we have seen pictures on WhatsApp of fuel said to be sold at $7,89 per litre and because of this, the public has panicked and rushed to buy fuel, thus creating shortages.”

He said to mitigate the fuel challenges, a six million-litre ethanol storage facility was being built to ensure the sustainability of the 1:20 ethanol blending, as well as looking at the introduction of solar-powered and hydrogen-powered vehicles.

Chasi said there was need to develop rules by the petroleum sector to ensure that people with fuel coupons are not affected, adding his ministry would continue to identify miscreants in the fuel industry that cause the shortages.

Mangudya said adequate funds had been made available for procurement of fuel, with $115 million letters of credit (LCs) issued for fuel imports.

The amount is enough to purchase 170 million litres against a monthly requirement of 130 million litres, he said.

He added that the RBZ was servicing a $200 million legacy debt which affected companies like Total, Engen and Trafigura.

“So fuel is plenty in Msasa. All LCs were at an exchange rate of 4,625% and there was no need for fuel companies to use the current exchange rate to sell the fuel because it means they will be benefiting themselves,” Mangudya said.

“They should use the rate for which the LC was established. There was no price increase and there was a social media price announced, and because of lack of confidence people listen to alternative facts and followed the panic mode.”