Sunday, 2 February 2020

FUEL STATIONS DEMAND FOREX


There has been an increase in filling stations that are illegally selling fuel in foreign currency in Harare, despite the promulgation of laws which make the local currency the sole legal tender.

This has made it difficult for motorists to access fuel. Fuel is being sold in foreign currency for anything between US$1,25 per litre and US$1,50. A litre of petrol fetches US$2 on the black market.

Statutory Instrument 212 of 2019 (Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019) allows guests of the State only to buy petrol, diesel or other petroleum products in foreign currency, but only at designated outlets.

Last Friday, Energy and Power Development Deputy Minister Magna Mudyiwa said the sale of fuel in foreign currency was unlawful.

“It is only those few designated service stations that can sell in foreign currency. They exclusively sell to diplomats and guests of the State,” she said.

“All other service stations doing that are violating the law and we shall, through the Zimbabwe Energy Regulatory Authority (ZERA), enhance our surveillance system. 

“It has to be clear to every trade, service stations included, that the Zimbabwe dollar is the only legal tender applicable in our economy except those who fall in the category I have made reference to.”

The sale of fuel in foreign currency has drawn mixed feelings from consumers with some complaining that they were being ripped off, while those with access to foreign currency viewed it as a better option.

A survey carried by The Herald showed that some filling stations, particularly those in outlying areas of the central business district (CBD) were selling fuel in foreign currency.

Last year, the Government liberalised the importation of fuel and gave companies with free funds permission to import fuel for their own use.

The move was expected to augment supply gaps in the market. The envisaged beneficiaries of that policy were mining companies and those in the farming sector. 

Deputy Minister Mudyiwa said the Government, through the central bank, was finalising the renewal of letters of credit.

“I have not heard enough briefing from my officials since I am out of office, but I know the challenge relates to the finalisation of the letters of credit, but what we need to emphasise as a ministry is that we have enough fuel in the country at Msasa and Mabvuku depots,” she said.

Letters of credit are guaranteed by the Reserve Bank of Zimbabwe (RBZ) that payment will be made in future, and oil firms are allowed to pay in local currency for fuel to be delivered.

They help reduce payment risks on international trade transactions, and with a letter of credit, a company’s bank can guarantee payment to a seller if certain criteria are met.

Most major oil companies like Total Zimbabwe, Engen, Petrotrade, Zuva Petroleum and Puma have adopted the use of these letters of credit to circumvent foreign currency shortages.

The letters of credit were most effective during the festive season when they helped with the disappearance of queues as fuel became readily available, albeit for the few days. Herald

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