Zimbabwean dollar fuel has always been sort of like Bigfoot. You hear legends of it, how some lucky motorist chanced upon a service station selling Zimbabwean dollar fuel and had his or her fill. How it was exhilarating to hand your ZIMSWITCH card to a fuel attendant afterwards. It’s the stuff of dreams and now you can kiss that dream goodbye as the RBZ seems to have given up on funding Zim dollar fuel.
For the past two months, we have seen a marked drop in forex allocations going towards gas and fuel. This was the principal way by which service stations would obtain the foreign currency that allowed them to import fuel to sell in ZWL. The problem is that most fuel stations were greedy thanks to existing arbitrage opportunities brought about by the favourable official rate against the market rate. They would simply sell this fuel in USD, buy the ZWL on the black market and pocket the difference.
The government was wise to this phenomenon but they had no choice but to continue to fund the service station as they feared that stopping would result in a spike in fuel prices. It seems the government has outgrown its fear. This week for example allocations towards fuel and gas were both zero.
What this means is that while Zimbabwean dollar fuel was rarer than a pangolin for the better part of this year it’s now non-existent. Your chances of you happening upon a fuel station that will sell you fuel in ZWL at the official rate are now exactly zero whereas before they were slim but non-zero.
Hurtling torwards dollarisation
It has been two years since the government hastily and if I might say so deceptively foisted their latest reincarnation of the Zimbabwean dollar upon a very unwilling populace who didn’t trust their intentions. The government has done everything people feared they would do including using a fixed rate countless times and forcefully taking exporters’ foreign currency.
Things are not looking good for the local dollar and the government is entirely to blame however you look at it. Both for their hapless policies which have been incoherent, inconsistent and hasty as well as for allowing “saboteurs” to have their way on the streets.