Zim fuel consumption more than doubles

Published: 07 April 2014

Zimbabwe's fuel consumption has more than doubled in the past three years although the country's major industries are sneezing.

Figures compiled by the Zimbabwe Energy Regulatory Authority show that consumption of diesel and petrol increased from 556 097 223 litres in 2009 to about 1 381 434 530 litres in 2013.

The sharp increase gives credence to claims that several billions of US dollars are circulating in the informal sector.

It is believed that the informal sector is accounting for the greater chunk of fuel usage amid increased imports of second hand vehicles from Japan and the United Kingdom.

Zera chief executive Engineer Gloria Magombo last Friday told the media that there was "another economy" running parallel to the formal economy.

"There is an economy somewhere," she said.

"Consumption cannot keep growing. The consumption of fuel is not even matching the growth of the rest of the economy. What it means is that there is an economy somewhere which is not part of the formal economy."

Eng Magombo said mining and transport were the biggest consumers of fuel in the country.

On Thursday, Small and Medium Enterprises and Co-operatives Development Minister Sithembiso Nyoni told Parliamentarians that at least $7,4 billion was circulating in the informal sector.

While the usage of diesel and petrol has increased, consumption of jet A1 declined dramatically over the same period. Zera said Jet A1 use decreased from 17 338 308 litres to 5 398 000 litres.

The decline is largely attributable to challenges being faced by the national carrier, Air Zimbabwe.

At one point the national alirline halted its operations due to viability challenges.

Currently Air Zimbabwe has less than five planes that are taking to the skies resulting in low uptake of jet A1.

Turning to energy production, Eng Magombo said Zera had licenced no less than 10 independent power producers which are undertaking 15 projects.

Of the 15 projects, she said only five were operational.

Eng Magombo said the biggest power projects took time to be operational. Such projects include a 600MW power station being promoted by Makomo Resources, and another of equal size as a joint venture between local investors and Chinese investors.

The other big electricity projects are Gokwe North and another 600MW megawatt power project being promoted by Essar Investments.

Eng Magombo said the development of such projects was in line with the implementation of Zim-Asset.

"If you look at Zim-Asset, power and energy are the key enablers for this economy to take off," she said. "We are trying to move all the projects and we are happy that there is a lot of progress. Even some of the investors who were not interested in Zimbabwe are now coming."

She said all the big projects were valued at above $1 billion and as such could not be implemented over night.

"From the time we licence them, they need between three and four years to put the necessary documents together and to get that amount of money," she said.

She said the World Bank had released almost $2 million for the Batoka project.

Economists say the money Zimbabwe pumps out daily could be better used to capacitate local industry.
- the herald

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