Fuel imports increase on back of electricity crisis
THE value of Zimbabwe’s fuel imports rose to US$1.2 billion in 2022 from US$1.1 billion in the prior year as global markets experienced supply chain disruptions of the commodity from the outbreak of Russia’s war on Ukraine, officials figures availed to The NewsHawks have shown.
Erratic power supplies, which have increased demand for fuel-run generators and a sharp spike in imported vehicles over the years, have resulted in the spike in the commodity.
Geopolitical tensions in Eastern Europe heightened in February 2022 when Russia invaded neighbouring Ukraine, triggering a chain reaction of actions which caused tremors across the globe.
The effects of Russia’s invasion of Ukraine were felt across the world, as well as in Zimbabwe, as record-high oil prices, excessive spending during forthcoming elections and disruptions of wheat supplies stoke inflation, with ordinary Zimbabweans suffering the brutal ramifications.
Following the outbreak of the conflict, which is ongoing, Zimbabwe, whose fuel prices spiked from an average of US$1.10 for a litre of blended petrol at the start of the year, dramatically jumped to around US$1.70/litre.
Debt-ridden Zimbabwe was named by the World Bank as one of the sub-Saharan African countries affected by the Russo-Ukraine conflict.
Statistics availed by the Zimbabwe National Statistics Agency (ZimStat) show that fuel imports for the southern African nation have been on an upward trend since 2021 rising from US$1 billion. The imports rose to US$1 126 623 051 in last year. During the period under review leaded petrol worth US$100 million was imported using free funds, according to ZimStat.
Apart from fuel supply disruptions, the conflict also led to the scarcity of food, particularly cereals and fertilisers.
Russia and Ukraine are major wheat producers due to their favourable climatic conditions for the production of the cereal and the conflict between these two countries is resulting in increased grain prices.
Prices of bread and Zimbabwe’s staple mealie-meal also rose due to a war-induced spike in commodity prices on the global market. Official figures show that Zimbabwe is consuming 16 000 metric tonnes of bread flour monthly, and approximately 1.2 million loaves a day.
After the outbreak of the Russia-Ukraine war, economic commentators predicted that Zimbabwe, which recovered from two years of economic contraction between 2019 and 2020, would backslide and miss its key growth targets due to the geopolitical tensions despite getting a shot in the arm from the International Monetary Fund.
The southern African nation received the equivalent of nearly US$1 billion worth of IMF Special Drawing Rights holdings to help cushion the country against the effects of the Covid-19 pandemic which has claimed the lives of millions across the globe.