Fuel consumption in Zimbabwe has declined by 35 million liters following the January fuel price hike, said Reserve Bank of Zimbabwe Governor, John Mangudya.
Coming as a result of President Emmerson Mnangagwa announcing a fuel price increase of 150 percent, fuel consumption dropped from 165 million liters of fuel per month to 130 million liters per month.
Speaking to the Parliamentary Portfolio Committee on Energy and Power Development last Thursday, Mangudya said that the current fuel shortages and price hikes were a result of a slow-moving and arduous international financing system.
The country utilizes Letters of Credit to purchase fuel from other countries, which are issued by banks to secure payment of commodities. Because these documents are issued by local banks, they require confirmation by an external bank and advisory bank. As such, they incur time delays, which in turn slow the delivery of fuel to the market.
In the committee meeting, Minister of Energy and Power Development Joram Gumbo said that the government has recently accepted the Ministry of Energy and Power Development’s plan to liberalize the petroleum sector and allow companies with capacity to import their own fuel.
Gumbo accredited the drop in fuel consumption to decreased demand due to higher prices and the halting of illegal fuel exports.