Roadside fuel sales

A 44-gallon drum of fuel and a funnel is the roadside symbol of the government’s deregulation of Zimbabwe’s fuel supply industry. The move has not resulted in chains of new service stations criss-crossing the country, but rather illicit boot sales of fuel that has raised serious safety and environmental concerns, industry sources told IRIN. They allege the government has championed the entrance of politically-connected black entrepreneurs into the industry in a deliberate attempt to end the monopoly of the major multinational oil companies. Despite a crippling fuel shortage, over the past six months the original big five oil operators in Zimbabwe have been joined by an additional eight firms competing for haphazard supplies from the state-owned National Oil Company (NOCZIM). “Rogue sellers are appearing on the roadside and somebody has dropped them. It’s totally blatant but its being ignored by the law and order agencies,” one oil industry source who asked for anonymity told IRIN. By offering an alternative to the interminable fuel queues at orthodox service stations, “immense profits are being generated because there are no overheads.” According to economist John Robertson, the government is “deregulating an industry that seriously needs regulation, just for safety reasons.” He said there were “at least 50 regulations” being broken by the fuel hawkers, but the police were turning a blind eye. “These are bombs waiting to go off, let alone the problems of fuel contamination,” added Robertson. “The government appears to be trying very hard to give an inside track to people to indigenise the industry at the expense of the old majors, which mainly means a lot more uncertainty,” Robertson said. But, “at a much more sinister level, without the backing of the party you do not get an allocation.” The newly-emergent fuel suppliers do not have the station networks, so are forced into roadside sales or bulk consignments to heavy users. Despite allegations of “favouritism” in NOCZIM’s allocations, the new companies are forced to struggle - rather than being empowered - as a consequence of Zimbabwe’s long-running foreign currency shortage. “Under these conditions it is very difficult for the newly-emergent businesses to get off the ground. It (the fuel shortage) is a chaotic mess that is not going to come right until we get an influx of foreign exchange,” said Robertson. And with IMF and World Bank lending suspended, and investors shying away, “that is not even on the horizon.”