Simple economics that could save fuel, money

Zimbabwe is currently gripped by fuel shortages that have seen long queues at most service stations across the country as motorists struggle to fill up their tanks. The country requires 4,1 million litres of diesel and 3,8 million of litres petrol daily, which now gobble US$32 million weekly.

That is according to the Minister of Energy and Power Development, Dr Joram Gumbo, whom we quoted in a report yesterday.

A simple extrapolation of the above figures shows that Zimbabwe’s annual consumption of fuel costs us a cool $1,7 billion — and rising.

Foreign currency shortages experienced in the country mean that money is not always available to ensure that there are adequate and uninterrupted supplies, leading to intermittent availability attended by panic buying and distress. This is the mode that we are in now.

The minister says there are enough fuel stocks in the country, but that there are foreign currency shortages to pay for it from the bonded facilities where it is held.

It is a structural problem where the fuel situation is a sign of other compound ailments affecting Zimbabwe.

There have been indications of authorities quickly dipping into the fiscus to pay off fuel suppliers to avert a crisis, and obviously the bad optics that are the fuel queues and this, we are afraid, does not help the structural issues of the economy.

There is no doubt that where fuel is concerned, Zimbabwe is living from hand to mouth. Interestingly, there could be a way of finding a medium to a long-term solution to the problem.

Zimbabwe does not produce oil — that is a fact — and a solution lies in tempering our appetites (after all, we are in the age of austerity) and investing in infrastructure that will ensure a fuel efficient economy.

Zimbabwe has a vehicle population of an estimated four million cars, a statistic that has risen over the past few years owing to a spike in importation of second-hand cars.

A majority of these are small personal cars as indeed can be observed at the fuel queues.

These cars are both for the convenience of movement and for prestige purposes. If the country is to cut a huge chunk in its consumptive behaviour, this could be a starting point.

Government ought to raise the cost of this deleterious luxury by making people pay more duty for personal car use while at the same time incentivising mass public transport systems.

One can only imagine what a difference $32 million — a week’s worth of fuel supply — would do to the infrastructure of mass public transport?

Good infrastructure, accompanied by disincentives for private luxury car use, could see mass public transport not only being efficient, but also coming into vogue.

That way the country can save millions of dollars, ensuring that the nation moves, literally, with its appetites under control.

Mass transport will also be good for the environment. It bears noting that the Finance Minister, for example, is not a big fan of luxury vehicles and just recently introduced hard currency payments of duty on car imports.

He defended the move, advising Zimbabweans to be prepared to pay for imports in the currency in which they would have bought goods. It is that logical.

It is facing the beast in the eye.

On the other hand, citizens must be prepared to embrace measures meant to revive the economy, even if they hurt a little.

Without a buy-in and indeed a change of attitudes, nothing will change and the country will remain stuck in a queue to nowhere. This is the message Dr Gumbo should be bold enough to convey to Zimbabweans — cutting on wasteful if not abuse of fuel.

We can’t keep on pumping more scarce forex into fuel for people to burn on clogged Harare roads when that money could be used to purchase medical supplies or fund agriculture to feed the nation.

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