The Acting Chief Executive Officer of Petrotrade, Godfrey Ncube, stated the liberalisation of the fuel sector in Zimbabwe is the right step to take in combating fuel shortages that have rocked the nation for days and lead to a long, endless queue of motorists.

He appeared before the Energy and Power Development Committee of the parliament last Thursday. He said the situation can only be solved permanently if private marketers are given the freedom to buy and sell the product in US dollars. He although noted that this proposal may likely result in a hike in the price of goods and services which is a norm whenever there is an increase in prices.

He told the committee that the Reserve Bank of Zimbabwe’s (RBZ) foreign exchange auction is not benefitting from fuel dealers as they do not have the freedom to set their prices and are forced to charge set prices by the government which means most of them are running losses.

Since the scrapping of a multi-currency system by the Zimbabwean government in 2019, ten years after the government dumped the national currency for some foreign ones, the country has been facing fuel shortages. Suppliers are not allowed to trade in US dollars and the selected few with a license to do so are restricted to selling at particular fuel retail stations.

Excerpts from Ncube’s oral presentation at the parliament:

“Let me just be clear here, I did not specifically say government should now let companies do what they want, buy fuel whichever way they can.”

“All I said was that under these circumstances, the model that can also be adopted and can work is that the sector can be liberalised and companies allowed to look for their own fuel.”

“Companies are in business and if they are told to look for their own fuel, they will look for that money.”

“However, prices will rise and that is not favourable for government and it will be difficult, government is still subsiding fuel.”

“If the situation continues to deteriorate like this, it will be better that government adopts a liberalised system, liberalised in terms of procurement.”

“As far as procurement is concerned, you will realise that you would have liberalised the pricing of it.”