Foreigners to pay for Zimbabwe fuel in forex

Foreigners to pay for Zimbabwe fuel in forex

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By Stella Mapenzauswa

FOREIGN-REGISTERED vehicles driving in Zimbabwe will be compelled to buy fuel in foreign currency as the country grapples with a shortage which has grounded automobiles over the past few weeks, the central bank said on Thursday.

Zimbabwe requires 2.5 million litres of diesel and 2 million litres of fuel every day, but imports have been erratic since 1999 amid acute foreign currency shortages due to poor exports.

"As a country, our (fuel) bill could end up taking more than a third of our foreign currency earnings if we don't do something about it," central bank governor Gideon Gono warned in his mid-term a monetary policy statement.

Gono said from August 1, motorists with access to foreign currency would be able to buy fuel at an initial price of $1 a litre at designated garages to boost foreign currency inflows into government coffers.

"Foreign registered vehicles and trucks passing through our country will also pay for fuel in foreign currency. This intervention will go a long way in relieving the foreign exchange pressures in the market," Gono added.

On Thursday state media reported that Zimbabwe's national airline has been forced to suspend some domestic and international flights due to the fuel crisis, which has left garages dry for weeks, forcing many urban commuters to walk to and from work.

The crisis has also hit production in the manufacturing sector and slowed key tobacco deliveries, piling pressure on an economy which has shrunk by over 30 percent since 1999.

Gono said the southern African country, suffering its worst economic crisis since independence from Britain in 1980, required 900 million litres of diesel and 730 million litres of petrol per annum to operate at full capacity.

Earlier this week President Robert Mugabe's government, also grappling with food shortages, record unemployment and one of the highest rates of inflation in the world, said it would allow individuals with access to foreign currency to directly import fuel to help ease shortages of the commodity.

Mugabe, 81, denies he has mismanaged the economy and instead charges it has been sabotaged by local and international opponents over his controversial seizure of white-owned farms for redistribution to landless blacks - Reuters
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