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Zim scraps fuel scheme
19/07/2007 14:00 - (SA)
Harare - Zimbabwe has scrapped a scheme allowing fuel purchases with foreign currency, removing one of the few remaining ways for people to acquire petrol in a country struggling with a crumbling economy.
The facility was also used by foreign diplomats and officials working for international aid organisations.
Zimbabwe had experienced several years of acute fuel shortages as an economic crisis - many blamed on President Robert Mugabe's government - had left the country with no foreign currency reserves and the highest inflation rate in the world.
Three weeks ago, Mugabe ordered a blitz to slash prices by half after the cost of some basic foodstuffs rose three-fold within a week, saying businesses were doing this as part of a Western-sponsored plot to oust his government.
Zim on brink of collapse
The price freeze had sparked a wave of panic buying that had emptied Zimbabwean shops of basic commodities, and critics said the formal economy was tottering on the brink of total collapse.
In a statement broadcast by state media on Thursday, a committee enforcing the controversial price cuts said the government had banned foreign currency coupons allowing people to get scarce fuel from private oil companies or individual importers.
It said: "The Task Force is giving all coupon holders two weeks from today, within which to acquit their coupons. No new fuel coupon sales should be made forthwith."
No reasons were given for the move, and both government and private oil companies were not immediately available for comment.
In the past, the government had accused fuel coupon holders of selling fuel on the black market at highly inflated prices.
An official with a major fuel distribution firm in Harare said oil industry officials were locked in meetings to discuss the government order. The government task force said firms and individuals with compliance problems should contact authorities.
Fuel costs about $1 a litre
A year ago, the government scrapped its own facility, where motorists could buy fuel at state-designated filling stations with foreign currency, saying it was spurring corruption and black market trading.
Fuel costs about $1 a litre through the foreign currency coupons, but the equivalent of about $4.50 on a black market thriving on lack of consistent fuel supplies in the economy.
Zimbabwe's chronic fuel shortages had at times spurred public transport operators to pull vehicles off the road, forcing thousands of urban commuters to walk to work.
Mugabe, who had been isolated by the West over his policies, had also failed to secure concrete fuel supply deals from "friendly" countries such as Libya and Equatorial Guinea.
The veteran leader, in power since independence from Britain in 1980 and seeking victory in elections due in March next year, rejected criticism that he had ran down a once-vibrant economy.
He said Zimbabwe had been sabotaged by opponents of his seizures of white-owned commercial farms for landless blacks.
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