In 1997, the consumption of liquid fuel products was of the order of 1,4 million tonnes according to the US Department of Energy. The breakdown of consumption per product is given below:
Product Consumption 1997
(in metric tons)
Jet fuel 179,977
According to reports from SADC, the present consumption is estimated at 1,7 million metric tons. The manufacturing sector and the retail sector use the greatest percentage of petroleum products. In recent years, there has been an increase in liquid fuel consumption, particularly in diesel, which is cheaper than gasoline.
Distribution and Marketing
Engen of South Africa entered Zimbabwe in 1996 when it acquired Ximex Oils, a local company specialising in industrial lubricants and petrochemical products, but not fuels. In December 1998, Engen acquired a licence to distribute a full range of petroleum products with a petrol station operational in the year 2000. Engen hopes to capture 10% of the market share within three years.
Distribution infrastructure and storage
Most of the imported product comes into the country through the pipeline from Beira to Mutare and Harare, while the rest comes from South Africa via road or rail. The pipeline is owned by Petrozim, a joint venture between Noczim and Lonrho. Internally distribution takes place via rail, road and pipeline. Bulk petroleum products are piped from Beira to Feruka and from there to Harare where they are stored before being distributed by road and rail.
The main storage depots are at Beit Bridge, Feruka and Harare.
A policy change was introduced in 1999 so that by 2000 Noczim would be able to adjust its prices against trends on the international market without government intervention. This policy will be implemented once Noczim’s external debt, estimated at around Z$ 9 billion, has been sorted out. At present, the Zimbabwean government regulates all pricing. It fixes Noczim’s selling price to oil companies, the price at which the Motor Trade Association purchases and the pump prices.
Since the fuel shortage crisis precipitated in December 1999, there have been a number of price increases. In August 2000, petrol rose 41%, diesel 54%, jet fuel 52% and paraffin by 101%.
The fact that all petroleum supplies are imported means that Zimbabwe has no control over the price of fuel and is vulnerable in the event of civil disruption at either local or international levels. This has proved to be true as matters have developed in Zimbabwe since June 1999 where a growing fuel shortage crisis started to develop.
In June 1999, the Zimbabwean government began a series of price increases and were considering rationing fuel to alleviate a growing fuel crisis at the National Oil Company of Zimbabwe (Noczim). At the end of 1998, Noczim’s losses were of the order of US$ 145 million which was attributed mainly to corruption and mismanagement. By the end of 1999, it was being claimed in the press that the Noczim debt was six times this figure and that the parastatal was unable to service its debts.
In December 1999, several lines of credit were cut to Noczim. The fuel shortage in Zimbabwe continued through the year 2000, despite Noczim having gained lines of credit from Botswana, European and Arab Banks ($100 million) to finance a deal with Kuwaiti Independent Petroleum Group to supply short and long term oil needs. The government has attributed the fuel shortage to corruption and fraud within Noczim and to illegal exportation of oil to neighbouring states by informal traders.
As part of an attempt to deal with the problem, Noczim applied to put its assets on the market and the price of fuel was raised five times in the first three quarters of 2000. In July 2000, Noczim put its Harare headquarters, its 49% equity in Total Zimbabwe, its 76% share in Oil Blending Enterprises and its offices in Chirundu on the market.
In August 2000, however, it was reported that thousands of litres of fuel destined for Zimbabwe were still blocked in Beira storage tanks because the government did not have the funds to pay for the supplies.
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