Zimbabwe injects $50m to ease fuel shortages

The appalling fuel situation in Zimbabwe has started to improve and is expected to get better due to the intervention by Government through availing Letters of Credit (LCs) worth over US$50 million to oil companies.

Energy and Power Development Minister Dr Joram Gumbo who said this yesterday while responding to questions from journalists during a post-Cabinet briefing also gave the list of companies to be Engen Petroleum, Total Zimbabwe, Zuva Energy and Puma Energy.

“At least four or five big oil companies have already started picking up fuel.” 

He said Total Zimbabwe had LCs of about US$13 million which have matured; Zuva US$12million and Engen US$25 million.

Some small fuel companies were given their usual allocations and cash.

LCs, also known as a documentary credit or letter of undertaking, are a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods.

Meanwhile, Dr Gumbo said Government’s decision to liberalise the foreign currency exchange rate in February has resulted in a decline in fuel consumption.

Consumption of diesel has gone down to about 3 million litres per day while petrol consumption has also declined to about 2 million per day.


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