Police seize fuel

HARARE - Police last Thursday seized more than 300,000 litres of fuel from private oil companies in the Southerton Industrial area accusing them of profiteering from long standing arrangements in which they buy fuel at subsidized prices from the state oil procurement monopoly,

National Oil Company of Zimbabwe, NOCZIM.
The senseless blitz, led by one Inspector Munyakamwe, was aimed at forcing the private oil companies to sell fuel at the regulated price of $335 a litre although the dealers had bought the fuel at $540 a litre from NOCZIM while others had imported the precious commodity.
After years of acute fuel shortages, President Robert Mugabe three years ago deregulated fuel imports and demanded that private oil companies supply fuel from their external hard currency reserves.
Angry oil industry executives slammed the crackdown, which is being spearheaded by a taskforce created through the Soviet-style committees under the National Economic Development Priority Programme, saying it was unsustainable to sell fuel at loss.
The effect has been a deepening fuel crisis spawned by the shortages as private oil companies simply refused to sell their fuel at that price. Executives said privately the crackdown late Thursday caused disarray in the energy sector and has pushed up the price of fuel to as much as $1,200 a litre.
The crackdown also lent credence to reports that a deal with South Africa and Equatorial Guinea to provide $30 million worth of fuel a month for the next year was falling apart after Zimbabwe failed to pay arrears in shipping and handling costs.
The government has pegged the price at $335 in a bid to hold down inflation, now running at a record 1,200 percent in the nation’s worst economic crisis since independence in 1980.
Acute hard currency shortages since 1999 have led fuel stations to run dry, with long lines of cars regularly waiting for deliveries.
The hard currency shortages have pushed up the illegal black market exchange rate to more than 850 Zimbabwe dollars to one U.S. dollar, compared to the pegged official exchange rate of 250-1.
International oil companies have said they would need to buy hard currency at inflated rates of a blended mix between the official and unofficial rates to remain viable.
Civil unrest erupted three years ago when fuel was raised by 30 percent. Commuters boycotted transport firms and vehicles were stoned until fuel prices were reduced on government orders.
Back then, Mugabe said foreign oil companies would be required to use their external hard currency funds to import fuel, but oil companies insist that they must be allowed to remit some hard currency abroad to avoid being left with large amounts of Zimbabwe dollars in a hyperinflationary economy.
Mugabe described state fuel imports sold by foreign oil companies in Zimbabwe as “this game of foolery” that reaped huge profits for them and losses for the state.
Part of filling stations that lost huge amounts of fuel include Birmingham Road Motors which lost 10,000 litres, Muhammed Mussa which lost 40,000 litres, Caltex Coventry, among others.

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