Fuel consumption hits 1,2bn litres after bounce back

ZIMBABWE’S fuel consumption increased to almost 1,2 billion litres during the 11 months to November last year, compared to just over one billion litres in 2020, data from the energy regulator showed yesterday.

The Zimbabwe Energy Regulatory Authority (Zera) said in a market update that the country guzzled 1 152 198 301 litres during the period, 10% more than the
1 035 624 744 litres used during the same period in 2020.

The energy regulator said diesel consumption increased to 711,5 million litres, up from 676,7 million litres previously.

It said Zimbabwe consumed 440,7 million litres of petrol during the period, compared to 359 million litres during the same period in 2020.

The surge confirmed sharper demand across markets as industries returned to production following a tough 2020, when damaging lockdowns were rolled out to fight the spread of COVID-19.

“In 2020, we had more COVID-19 restrictions, which obviously restricted movement and economic activities,” Prosper Chitambara, chief economist at the Labour and Economic Development Research Institute of Zimbabwe, told NewsDay Business.

“The situation was better last year. We had improved movement and economic activity was much higher last year.”

In August, central bank data showed the country’s manufacturing sector had emerged from the crossfire of COVID-19-induced lockdowns resulting in a bounce-back.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said after expanding capacity utilisation to 56% during the second quarter, from 47% in December 2020, the recovery impetus has gained traction, with some firms reaching 95% of their installed
capacities.

However, foreign currency shortages, a fragile local currency and high inflation remained the biggest drawbacks.

On Wednesday, independent economist Clemence Machadu said the rebound bolstered demand for fuel in 2021.

“The trend was consistent with the increased economic activity for 2021 and the relaxed lockdown regulations, which saw some previously restricted sectors opening up and the ones that were operating increasing their capacity,” Machadu told NewsDay Business.

“This increased their fuel consumption for activities related to transportation, generators, heating and others,” he noted.

The 2021 petrol monthly consumption saw January registering an uptake of 30,7 million litres, with February recording 30,688 million litres.

Zera said in March, consumption was 43,3 million litres.

Consumption declined to 30,4 million litres in April before surging to 50,2 million litres in May.

Zimbabwe now has the highest fuel prices in the Southern African Development Community compared to regional peers, which are charging significantly lower prices.

Zambia’s fuel costs US$0,97 per litre, Botswana US$0,728, Mozambique US$0,898, Namibia US$0,85, and South Africa US$1,073.

Zimbabwe sells petrol and diesel at US$1,42 and US$1,38, respectively.-newsday