Zimbabwe fuel consumption declines after price hike: minister

HARARE, March 7 (Xinhua) -- Zimbabwe has seen a marked decline in fuel consumption over the past two months following an increase in the price of fuel by more than 100 percent.

Both energy minister Joram Gumbo and central bank governor John Mangudya confirmed the development before a parliamentary committee on energy Thursday.

"The change in pricing has also seen some savings that we have noticed of late. Over the past two months, figures have shown that fuel consumption has been going down and we believe that it is because of the price increase," Gumbo said.

Government hiked the price of diesel and petrol by more than 100 percent in January, pushing the price of diesel to 3.11 dollars per liter from 1.24 dollars while petrol rose to 3.34 dollars from 1.37 dollars.

Gumbo said diesel consumption had declined to 3.2 million liters per day from 4.3 million liters in December 2018 while petrol had dipped to 2 million liters per day from 3.3 million liters.

He said the ministry was still assessing the country's new fuel consumption patterns before it can come up with definite explanations.

The minister said the decline in consumption could also be due to closure of loopholes that could have resulted in smuggling of fuel out of the country and hoarding of fuel for speculative purposes.

Central bank governor John Mangudya said the country imported 208 million liters of both diesel and petrol worth 173 million U.S. dollars in January and February against the required 280 million liters.

The supply gap was due to delays in clearance of letters of credit used to purchase the fuel, hence the shortage of fuel on the market, the governor said.

He, however, said the central bank on Wednesday this week put in place a financing facility that would help to bring sufficient fuel in the country starting this week.

Zimbabwe has been facing shortages of fuel since last year due to a shortage of foreign currency.