Brace for fuel price hikes: Mangudya

RESERVE Bank of Zimbabwe governor, John Mangudya has warned that foreign currency shortages coupled with the country’s shrinking export bill and galloping fuel prices on the global market will continue to push up the prices of fuel in the country.

BY VENERANDA LANGA

Mangudya sounded the alarm bells when he appeared before the Parliamentary Portfolio Committee on Mines and Energy, where he was accompanied by Zimbabwe Energy Regulatory Authority (Zera) chief executive officer, Gloria Magombo and Energy secretary, Partson Mbiriri.

He said the recent fuel shortages experienced on the local market were a result of international hikes in fuel prices, which resulted in RBZ’s $10 million weekly allocations for fuel imports falling short of the country’s normal requirements.

Mangudya, who bizarrely blamed the social media for exaggerating the fuel crisis, said the central bank has since doubled foreign currency allocation for fuel importation to $20 million per week to manage the supply gap.

“Maybe the shortages were logistical, because from a banking point of view, we allocated foreign currency to fuel companies weekly, and we have been providing $20,3 million for the past three weeks to fuel marketing companies on a weekly basis,” he said.

“International oil price projections suggest that oil prices may reach $100 per barrel by the end of 2018.

“Fuel is 100% imported and we use $80 million per month, yet we also import cash to purchase what we have imported.”

Zimbabwean petrol is blended with ethanol, which is produced locally, but Mangudya did not explain what he meant when he said fuel was 100% imported.

Instead, he said the adoption of plastic money would preserve foreign currency.

“If we all use plastic money, we will preserve US dollars to purchase fuel,” Mangudya said.

“The international price of fuel was $47,60 per barrel in June 2017, it was $71,90 per barrel in April 2018.

“It is about 30% increase and it means we were spending $1 on fuel in June 2017 and now we are spending $1,35 and these are factors that are outside Zimbabwe’s control.”

The RBZ boss said as long as the country’s imports bill continued to outweigh the export one, shortages would remain unresolved.

He said the country was spending $5,5 billion against $3,7 billion for exports, adding that in January this year, there were $2,2 billion exports, meaning the economy was expanding and the demand for fuel was increasing.

Mangudya said the country spends 40% of its foreign currency earnings on fuel imports, with diesel taking a lion’s share of $851,7 million, while $384 million is spent on petrol imports, giving a total of $1,2 billion per year.

The figures exclude import costs for liquified petroleum gas and electricity.

Mangudya said, next month, the country would require $91 million for fuel imports, projecting that the figure could rise to $100 million per month by year end.

The RBZ governor said neighbouring South Africa and Botswana’s fuel was slightly cheaper, while the cost in Zambia was comparable to Zimbabwe’s.

20 Comments

  1. Nothing is changing for the better in Zimbabwe. Things are getting even worse after the coup. Zimbabwe just needs a clean break from these clueless murderers.

  2. elsewhere we read that the world prices have tumbled to an all time low although that is not the indicator which determine our pricing model in zimbabwe and the only way out of this one is to reduce duty which is excessive mr mangudya

    1. Fuel prices oil time low?You have no idea what you are talking about.
      Do you even know what Brent and crude is.

      Learn about the global oil prices,as to comment better,

      1. was not talking fuel price but oil prices revisit my comment what determines our fuel price as consumers of final product is what is called parts prices for your information and i am a speciality in that and this came out on news over the weekend from the Arab producers and were contemplating of how to steady the prices and do not have blinkers,follow news as and when it happens

  3. Meanwhile CNN is reporting that oil prices are falling fast

  4. mundu ko mundu

    Meanwhile CNN is reporting that oil prices are falling fast

    1. you are following the news and governor is out of touch or chooses to ignore this new development for unknown reasons

  5. Mangudya….another rocket scientist like Gono. Where do they find these chaps?

  6. Its fuel price hikes and shortages, next it will be commuter fares followed by price increases of all goods and services, while someone says the economy is expanding. Kutonga kwaro. Nxaaa!

  7. Ruramai Mutemasaka

    When the prices were low we never benefited. Zimbabwe has the most expensive gas in the region yet you are busy broadcasting the sick mantra that we are open for business. Address the macro economic fundamentals first and these will then broadcast on your behalf.

  8. 1. Instead of “importing” the foreign currency JUST pay for the fuel by TT – difficult?
    2. Zimbabwe’s fuel is heavily blended with Ethanol – please STOP lying to people daily like we are STUPID!
    3. You have failed – your Bond Notes have failed – you PROMISED to step down “if” Bond Notes failed – when are YOU GOING???

  9. Mr. Mangudya,man in position like yours in the western countries, would have resigned just to keep their dignity and name clean; if the situation at the central bank was like what we are experiencing in Zimbabwe right now. For instance D.S. Kahn resigned as the head of IMF because of a sex scandal, a sex scandal that had no direct bearing or effect on how he was running the organisation. But then Mr. mangudya your current leadership is affecting lives of many people in Zimbabwe. In the streets of Harare and many other cities, people are selling US$; question is where do they get the greenback when banks are only issuing bond coins? The allegations that big chefs are involved in this trade of the green back on the streets seems correct. Sir you have failed and you just have to resign period. But like your predecessor, you are not a banker/business person but a member of Zanu pf and thus your trying to push politics at the expense of business ethics. It is common sense that if fuel price goes up then all commodities are gonna go up. Mr. mangudya you are just a fence post tortoise.

  10. Guys we are doomed this government has no clue as to how to run the economy

  11. Kuwiriranakwakanakakugarakunzwanana Garanewakomurudohamandishe

    Comment…Zvimwe munangochizvinyarara. Nekuti zvinhu zvakuvadza nyika zvingori achena asi azvisi kugadziriskwa. Semabhanga emumigwagwa. RBZ irikuiteyi nezvazvo? Hapana. Nekudaro, mabhangi acho aya ndeavanaani? Zvimwe, kunyarara zvirinani. Zvino kune mari yakabuda zvisiri pamutemo, billions. Kwadzoka mariyi, kwasara mariyi? Mwana weZimbabwe ada kuita TV, zvonzi kwete. Pedzezvo, motizve mari imwe irikubuda munyika ichibhadhara maDSTV. Vedzinza, vakafa, vapenyu nevasati vazvazvarwa, apana kwatirikuenda, ndapika zvangu.

  12. Kuwiriranakwakanakakugarakunzwanana Garanewakomurudohamandishe

    Comment…Zvimwe munangochizvinyarara. Nekuti zvinhu zvakuvadza nyika zvingori achena asi azvisi kugadziriskwa. Semabhanga emumigwagwa. RBZ irikuiteyi nezvazvo? Hapana. Nekudaro, mabhangi acho aya ndeavanaani? Zvimwe, kunyarara zvirinani. Zvino kune mari yakabuda zvisiri pamutemo, billions. Kwadzoka mariyi, kwasara mariyi? Mwana weZimbabwe ada kuita TV, zvonzi kwete. Pedzezvo, motizve mari imwe irikubuda munyika ichibhadhara maDSTV. Vedzinza, vakafa, vapenyu nevasati vazvazvarwa, apana kwatirikuenda, ndapika zvangu. Ko vana venyu vanodzidza kupi? Ko imi murikurapwepi?

  13. In Zimbabwe even if oil is a $1/barrel, fuel will still go for $1.3 or even more at the service stations.

  14. Jehovah pliz help us just help us

  15. Global oil prices are coming down on the back of announcement by Suid Arabia that they and Russia are increasing their oil production, source CNN

  16. why can’t you resign we had enough of your lies you guys

  17. Just a single statement can’t be a base for estimation.

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