New Zimbabwe law to licence fuel dealers

New Zimbabwe law to licence fuel dealers

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By Staff Reporter

ZIMBABWE has drawn up a law to create a commission to license fuel importers and set petroleum prices, seeking to exert new controls as the country grapples with serious fuel shortages.

The southern African nation has faced intermittent fuel shortages since 1999 due to scarce foreign currency, grounding both private vehicles and public transport and exacerbating the economic crisis gripping the country.

Although deliveries have improved lately, prices charged by private importers are nearly 20 times the official government price of 22,000 Zimbabwe dollars per litre.

Private garages sell fuel at up to 400,000 Zimbabwe dollars. The price usually tracks the exchange rate of the local unit on the country's thriving black market.

"The purpose of this bill is to establish a Petroleum Regulatory Authority which will regulate and license petroleum product providers," according to a government gazette seen by Reuters on Tuesday.

The proposed authority would technically be independent, but such bodies are usually tightly controlled by the government.

"The authority shall, after consultation with the Minister, prescribe the price of any petroleum product," the bill said, adding that the authority would do so after considering "the cost build-ups of petroleum products."

The bill is expected to go to parliament, where it would be easily passed by legislators of President Robert Mugabe's ruling ZANU-PF party.

At present, the Minister of Energy and Power Development prescribes fuel prices but last year started a programme that allows private importers to buy their fuel using their own foreign currency.

Economic analysts say while this has helped improve supplies, it is still inadequate, saying Zimbabwe requires about $45 million every month to import fuel for use and for strategic reserves - Reuters
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