Having oil in your country is usually considered a blessing and not a curse. It usually means as a country you can easily get to balance the books and for countries like Qatar it means a GDP per capita above 60 000 USD. However, as more and more oil is discovered prices have fallen down hurting some companies and economies in the process.
The current covid-19 pandemic has just upset an already struggling oil industry. Most countries have shutdown their industries resulting in very decreased demand for oil that has led to a dramatic fall in prices. While in 2011 prices went as $113 USD per barrel the highest they ever reached in 2019 was a paltry $71 USD.
In recent months prices have fallen to below $20 USD per barrel. Now in the US demand has fallen so far things have taken a turn for the worst:
Oil companies are now actually paying anyone willing to take their oil!
So bad are things that oil companies are willing to pay anyone who is willing to take oil from their hands. The alternative would see them having to pay prohibitive storage costs which they can avoid by just paying willing buyers to take oil from their hands.
This all comes as Zimbabwe has not felt the effects of this fall in prices on the global market even for fuel that is sold in US dollars. A lot of explanations have been offered by the government but the simple truth is that the government has not liberalised this sector well enough and some of the players are reportedly too close to the government.
One cannot escape the fact that Zimbabweans are getting a raw deal right now when it comes to fuel. In fact the country should be importing fuel at these massive discounts and storing it in national storage facilities instead of leasing them out in opaque deals to private players.
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