GRZ Attributes Fuel Shortage to Introduction of US$30,000 Transit Deposit on Zimbambwean Route

Minister of Energy has attributed the continued erratic fuel supply on the domestic market to Zimbabwe’s decision to introduce a transit charge of between US$22, 000 and US$30, 000, for petroleum trucks passing through that country to prevent transit fraud.

Delivering a ministerial statement in Parliament, Makozo Chikote said the transit deposit of US$22, 000 and US$30, 000 per truck has increased the demand on operating costs for Oil Marketing Companies (OMCs), who use the Zimbabwean route.

Mr. Chikote revealed that to avoid paying the high transit deposit, some OMCs have re-rooted their trucks through Chanida border, which is 400 kilometres longer than transiting through Zimbabwe, thereby increasing the turn around time and cost of transportation.

He said Government is engaging Zimbabwe at a higher level to address the issue because it has negatively affected Zambian petroleum transporters as the country has been experiencing fuel supply challenges for the past 14 days.

Mr. Chikote further disclosed that the other factor contributing to the fuel shortage is the delayed berthing of a Ship carrying petrol at the Port of Beira in Mozambique, leading to congestion, as some OMCs on the Zambian market with major market share, had locked orders for petrol which was on the vessel.
“Despite these setbacks, petroleum products have continued to be supplied through the Pipeline and road network across the country.”

“The Ministry of Energy has been engaging all the stakeholders in order to avert any major crisis during this period,” Mr. Chikote stated.

He also revealed that in the medium to long term, government is facilitating the construction of a bigger multi-product petroleum Pipeline alongside the current existing TAZAMA Pipeline.
“Private developers are being encouraged to develop other pipelines from our neighbouring countries, in order to adequately supply fuel at a reduced cost,” he said.

Mr. Chikote urged the public to avoid panic buying as government is doing everything possible to normalize the situation.

He also warned Oil Marketing Companies against selling fuel beyond the price stipulated by the Energy Regulation Board (ERB) because the petroleum sub-sector is a regulated industry.

Meanwhile, Mr. Chikote said Government’s decision to disengage from the procurement and supply of fuel was due to the debt accumulated by the previous administration of close to US$1 billion, resulting in inefficiencies in the management of fuel supply.