Zimbabwe’s government is considering rationing fuel as a temporary measure to alleviate a crisis at the National Oil Company of Zimbabwe (NOCZIM), media reports said on Monday.
The reports said the rationing could be a prelude to raising the retail price of fuel. A NOCZIM spokesman said fuel stocks were already low and that the company sold its fuel for up to 40 percent less than the import cost.
NOCZIM’s losses at the end of last year amounted to US $145 million, while oil industry sources estimated that the company was losing more than US $2.6 million a month.
Most of the losses have been attributed to corruption and mismanagement, but the government has refused to end the company’s monopoly on fuel imports citing “strategic considerations”.
Requests by the company to raise prices have been rejected by the government, which feared possible violent rioting from a populace already suffering under recent steep increases in food and commodity prices.
Inflation was now reported to be heading for 60 percent and President Robert Mugabe’s government has resorted to introducing a system of consumer price controls, which producers and manufacturers say are driving them into bankruptcy.
Oil industry sources said without an immediate increase in the price of fuel, some oil companies could be forced out of business. The increase would also affect the price of paraffin. Already in short supply, paraffin is used in most low income households for cooking and heating.
NOCZIM has increased fuel prices only twice despite the 65 percent slump in the value of Zimbabwe’s currency since late 1997.
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