eBusiness Weekly
1,4 bn ls in 2015 — 1,2bn in 2017
Fuel smuggling not ruled out
Hebert Zharare
Consumption of fossil fuels took a nose dive from 1,4 billion in 2015 to 1,2 billion last year, raising speculation that over 200 million liters could have been smuggled into the country through porous points and systems at ports of entry, Business Weekly has established.
Although some players in the sector argue in 2015 the country experienced electricity challenges that saw businesses relying on diesel generators, other observers in the industry said 200 million liters (14,3 percent decrease) is too huge to have been gobbled by generators alone.
Besides, the period also recorded reasonable economic growth trajectory in mining, manufacturing, agriculture sectors among other areas including a surge in number of motor vehicles – a scenario that is supposed to be characterized by high petrol and diesel demand.
There are about 1,2 million cars in Zimbabwe powered by diesel and petrol.
The Zimbabwe Energy Regulatory Authority (ZERA) CEO Engineer Gloria Magombo in written responses, told Business Weekly that diesel and petrol consumption in Zimbabwe declined from 2015 to 2017.
However, the demand for other energy sources such as electricity and Liquid Petroleum Gas (LPG) shot up.
“There has been a general decline in the fuel volumes between 2015 and 2017 from a combined 1.4 billion litres in 2015 to 1.2 billion litres in 2017. This is a reflection of lower rates of economic performance over that period,” argued Eng Magombo.
However, an industrialist who declined to be named for professional reasons, claimed economic challenges Zimbabwe faced during the period under review could not warranty a sudden decrease of fuel demand from 1,4 billion litres to 1,2 in slightly more than two years.
“There should be smuggling of fuel into the country going on. It appears there are some fuel imports that have not been captured by the system, resulting in such a huge gap reflecting. This calls for Government to investigate, I am sure the Zimbabwe Revenue Authority (Zimra)’s figures should reflect this too,” he said.
The industrialist said all other figures are reflecting an economy that is on a recovery path, but official figures for fuel demand are in the negative.
“The industry surveys show that the country is producing more, there are activities in the economy. Companies have invested more, the tax collection is up and Government is now able to pay salaries for civil servants. There was a decrease in total imports and more local products are on shop shelves. The decrease of over 200 million litres is too much, it’s actually difficult to understand,” said the official.
The Confederation of Zimbabwe Industries (CZI)’s president Sifelani Jabangwe, said it was critical to analyse the fuel pricing mechanism’s in 2015 before concluding on reasons why fuel consumption took a nose dive.
The business community is unanimous that high energy consumption is synonymous with economic growth, calling for serious investigations into why there is less demand for fuel while the country generally enjoyed significant economic growth during that period.
“There are so many factors at play here. The increase of prices of other goods could have reduced demand for fuel on daily basis. Although there is an increase in the number of vehicles imported recently, some people have since stopped driving their vehicles daily. But there is a need to understand why the demand went down that much,” he said.
Zimra had not responded to written questions send to it by the time of going to print.
On electricity consumption, ZERA indicated that demand for this energy source was characterized by some ups and downs.
“Electricity consumption figures were going up between 2012 and 2014 in tandem with economic growth taking place during that period,” she said. “The actual consumption went up from 8 963 Gigawatt/ hour in 2012 to 9783 GW h in 2014 before dropping 7055 GW/ h in 2016. In 2017, the figures recovered to 7667 GW/h as a result of good economic performance.”
Energy consultant, Engineer Ben Rafemoyo, said the consumption of electricity in a country was a direct measure of its economic performance.
“In 2012 we were at growth trajectory. In most cases the manufacturing industry, mining and agriculture are the major consumers of electricity in the country. In the electricity consumption pie chart, if domestic consumption is dominating, the economy will be down, but in this case the mining sectors have been on a rebound.
“However, industry production has not been growing lately, it has been falling. The agriculture sector has been coming up shortly, with many irrigation infrastructure being set up,” he said.
From 2014 up to 2016, there has been a general decline of power consumption that then started growing in 2017 as the economy started moving in the positive.
“During this era the economy was down as reflected by the Gross Domestic Product figures that were also down. However, there was an increase in some activities that resulted in some growth in the economy” he said.
