Thursday, 22 November 2018

FUEL QUEUES ARE BACK

Government assured motorists yesterday that there were no shortages of fuel and urged them not to engage in panic buying after long queues built up at filling stations.

Lengthy fuel queues were reported by motorists across Zimbabwe, including in the second capital Bulawayo, the eastern city of Mutare and the capital, Harare.

A survey by the Daily News in the capital, Harare, showed motorists at various service stations waiting for hours without getting to the pump. Jeffrey Muvundisi reports from Bulawayo that fuel shortages have resurfaced after almost three weeks of normal supplies.

A survey in the city yesterday indicated that Total and Glow Petroleum garages seemed to be the only ones that had the scarce product. Some garage attendants said they had gone for a week without fuel.
However, diesel was in full supply.

Meanwhile, the entire Plumtree border town had no petrol, forcing many to resort to the black market which has suddenly found a new lease of life after it had gone under in the last few weeks.

Motorists who spoke to this paper yesterday said: “I think this government has completely failed to address this fuel problem. As it is, it’s now clear that we are likely to go into the festive season with this problem.”

In Mutare, Bernard Chiketo also reported intermittent fuel shortages. Energy and Power Development minister Joram Gumbo, said rumours that pump prices would increase in the run-up to Christmas had contributed to the increased demand for petrol. He said the price rise fears were unfounded.

“From what I read from the social media and newspapers, people are rushing to buy fuel fearing that they will be shortages during the Christmas. The truth of the matter is that there are not going to be any shortages,” Gumbo said yesterday.

“We don’t have any challenges as government, there is no need to panic. Normal deliveries are coming. People may think that I am lying about this issue. I am not lying because hazvisi zvekwaGumbo it’s for the whole country.”

According to officials, the country is at the moment consuming four million litres of diesel up from 2,5 million litres a week while three million litres of petrol is being pumped, up from 1, 5 million litres per week.

Owing to the increase in demand for fuel on the market, the Reserve Bank of Zimbabwe (RBZ), which previously allocated $20 million for fuel, has increased the weekly allocation for the procurement of the commodity to $35 million per week.

The latest shortages come just weeks after crippling shortages brought Zimbabwe to a standstill last month through day-long queues for fuel, widespread power cuts at businesses that rely on diesel-driven generators and grounded planes.

Those shortages were largely caused by fuel importers struggling to find dollars to pay for refined oil products. That crisis only stabilised after local petroleum giant Sakunda Holdings and its partners provided government with 100 million litres of fuel, which will only be paid for after 12 months.
Sakunda, owned by local businessman Kuda Tagwirei, has also made commitments to supply 1,6 billion litres of fuel over the next 18 months.

Presidential spokesperson George Charamba told the Daily News yesterday that the 100m-litre deal was not a facility for every trader.

“It was availed by Sakunda, saka you find kuti not every re-fuelling point doesn’t have fuel. It’s a very interesting phenomenon because vese they are feeding off the palm of the RBZ.

“Saka pakaita any slight delay in the maturation yema lines of credit, it immediately reflects by way of availability of mafuel commodities, kuma different distributors. So, you find the story is not a uniform one. It now depends on the capacity of each distributor,” Charamba told the Daily News.

The deputy chief secretary to the President and Cabinet said there were sometimes supply bottlenecks in the 208-km long Harare-Feruka pipeline that delivers around 80 percent of the petrol and diesel requirements for the country.

Sakunda, through Trafigura, is reportedly renting the pipeline that has the capacity to deliver six million litres of fuel per day from Feruka to bonded warehouses in Msasa, Harare.

“There is a sequence of loading product in the pipeline. If you put diesel, you can’t put petrol and then put in Jet A 1, because petrol and Jet A they mix, by virtue of viscosity.

“What you do is if you put petrol, then you put in a heavy oil, which is your diesel in between and then you put in Jet A 1. As the product moves in in that sequence, there is some contamination when there is a combination ye diesel and petrol, and where there is combination of diesel and Jet A 1, that is what you call paraffin which is a contaminated product, that’s what you call kerosene,” Charamba explained to the Daily News.

“Now, here is the issue. Let’s say on a day like Wednesday you have injected in the pipeline 2m litres of diesel and then  inject another 1m litres of petrol, then inject another 1m of diesel to play buffer, then you inject another 500 000 yeJet A 1, it means when you receive and remember in the pipeline there is never a time when the pipeline has zero content, because if there is zero content, it means for a long time you will be pumping zero content, air, until the product travels from Beira to Harare.

“That’s why I was telling your colleague for anyone who wants to use the pipeline, you must always be able to procure double the capacity of the pipeline.

“Now when the product is coming to be discharged, it discharges in exactly the same sequence you loaded with. So, you can actually have a shortage of say Jet A 1 when it’s in the pipeline but before it has been discharged.

“Or if you are not pumping continuously, it can be stuck in there until you get another product to displace what’s in the pipeline,” Charamba explained.
“If you have done transport economics, that is the disadvantage of a pipeline as compared to road motor transportation of fuel products.

“So, if there is any disruption say because a line of credit has taken long when you don’t have reservoirs, it means that disruption will transmit itself throughout the market. And generally, how you try to even out such ups and downs is by creating what are called buffer stocks, which then smoothen the supply in the market,” Mnangagwa’s spokesperson said.

Asked what purpose the Msasa fuel depot in Harare was serving then if the country does not have buffer stocks, Charamba retorted: “But you want to ask yourself kuti mune chii (what’s in the tanks?) The presence of a tank is like the presence of a safe in an office. It doesn’t follow that its presence means it’s full. Saka, we have never been able to fill matanks ekuMsasa,” Charamba told the Daily News.

Fuel operators have largely attributed the obtaining intermittent fuel crisis to the shortage of foreign currency, as the country is grappling with serious liquidity constraints.

In terms of the arrangement that was created by the central bank, oil companies, which are top on the priority list, approach their banks and request that payment of a certain amount be made to a company that they will be dealing with on the basis of their nostro accounts.

Following the request, the bank would accept the request, with approval from RBZ. Daily News

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