The Herald (Zimbabwe) - - Front Page - Tendai Mu­gabe Se­nior Re­porter

GOV­ERN­MENT has as­sured the na­tion that there is enough fuel in the coun­try and that there is no need for panic buy­ing of petroleum prod­ucts by mo­torists.

This fol­lows re­ports of fuel short­ages at some ser­vice sta­tions that trig­gered panic buy­ing in re­cent days.

In a state­ment yes­ter­day, En­ergy and Power De­vel­op­ment Min­is­ter Si­mon Khaya Moyo said the fuel sit­u­a­tion was un­der con­trol.

He said there had been a steady in­crease in the de­mand of fuel in the coun­try at­trib­uted to an up­surge of eco­nomic ac­tiv­i­ties.

Min­is­ter Khaya Moyo also ex­plained de­vel­op­ments on the in­ter­na­tional mar­ket that have a bear­ing on the lo­cal sup­plies of fuel.

He at­trib­uted fuel price in­creases wit­nessed in the past few weeks to in­ter­na­tional mar­ket forces.

On the avail­abil­ity of fuel, he said Gov­ern­ment had strate­gic stock meant to cush­ion the na­tion in the event of sup­ply chal­lenges.

“I want to as­sure the na­tion that there will be ad­e­quate fuel sup­plies through­out the coun­try,” said Min­is­ter Khaya Moyo.

“The Gov­ern­ment urges con­sumers not to panic buy and horde petroleum prod­ucts which may re­sult in ar­ti­fi­cial short­ages. There will be al­ways ad­e­quate fuel sup­plies through­out the coun­try.”

“The fuel sup­ply sit­u­a­tion in the coun­try is a man­i­fes­ta­tion of mar­ket forces in the petroleum mar­ket at in­ter­na­tional level. In 2017, OPEC mem­bers and non-OPEDC mem­bers coun­tries led by Rus­sia, agreed to cut the oil pro­duc­tion out­put to clear the global glut of crude oil. The main rea­son for cut­ting pro­duc­tion was to ar­rest the con­tin­ued down­fall of crude oil prices which was then on the down­ward trend with the low­est price of crude be­ing US$43 per bar­rel in June 2017.

“Fol­low­ing the cut in pro­duc­tion, the price of crude oil has been on an up­ward trend. From June 2017 to April 2018, brent crude oil prices have in­creased to US$74,75 per bar­rel. This trend is ex­pected to con­tinue up to the end of 2018.”

Min­is­ter Khaya Moyo said the cur­rent im­passe be­tween the United States of Amer­ica and Iran might also dis­rupt crude oil sup­plies as Iran is a ma­jor pro­ducer of crude oil.

He said Gov­ern­ment was mon­i­tor­ing the fuel price in­creases ob­tain­ing in the coun­try.

“The fuel prices fol­low the same pat­tern as that of the crude oil prices, not­ing that there is a onemonth lag,” said Cde Khaya Moyo.

“This has seen the price of petroleum prod­ucts in­creas­ing last month in tan­dem with the crude oil prices. Zim­babwe as a price taker, has ex­pe­ri­enced fuel price fluc­tu­a­tions sim­i­lar to the pat­terns shown by In­ter­na­tional FOB prices.

“The only dif­fer­ence em­anates from the ini­tial drop in prices in Jan­uary 2018, which was a re­sult of a re­duc­tion in the du­ties charged on petrol and diesel by the Gov­ern­ment.”

Min­is­ter Khaya Moyo said petrol con­sump­tion in­creased by 22 per­cent in the last months while diesel in­creased eight per­cent.

He said al­though the Re­serve Bank had been al­lo­cat­ing US$10 mil­lion per week to fuel sup­pli­ers, the amount is not in tan­dem with the re­cent in­crease in fuel de­mand.

“The fuel al­lo­ca­tions from the RBZ have not in­creased to match the in­crease in con­sump­tion,” said Cde Khaya Moyo.

“This there­fore means that the US$10 mil­lion al­lo­cated per week is now procur­ing less quan­ti­ties of fuel than re­quired, given the cur­rent de­mand.

“Con­sumers should not panic as the Gov­ern­ment has strate­gic stock meant to cush­ion the na­tion in the event of sup­ply chal­lenges. Fur­ther­more, the in­ter­na­tional fuel traders con­tinue to pump fuel in the in­land bonded storage to en­sure con­tin­ued se­cu­rity of sup­ply in the coun­try.

“As of May 14, 2018, the third party stocks in bond in the coun­try are ad­e­quate for the next 25 days for diesel and 14 days for petrol. This fuel be­longs to in­ter­na­tional fuel traders.

“Lo­cal oil com­pa­nies can only ac­cess this fuel upon pay­ment for it in for­eign cur­rency,” ex­plained Min­is­ter Khaya Moyo.

He said ethanol pro­duc­tion ex­pected at the end of this month would also lead to re­sump­tion of fuel blend­ing that could also re­sult in fuel price re­duc­tion.

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