RBZ Governor Stops FCA Funding Fuel In ZimDollars, Issues LC’s For ZWL Fuel

Change this Subheading

Image Box Title

Change this description

Reserve Bank of Zimbabwe Governor Dr John Panonetsa Mangudya has revealed to TechnoMag, he “stopped the provision of fuel in Zimbabwean Dollars through funds from the weekly foreign currency exchange auction (FCA).”Mangudya will still fund fuel in ZimDollars availability but not through the FCA.

Change this Subheading

Image Box Title

Change this description

Governor Mangudya has instead come up with letters of credit (LC’s) which he will issue companies to access the facility through cooperation with the National Oil Infrastructure Company (NOIC).

“The companies will be supported through these letters of credit that are arranged through the Central Bank (Governor) and through National Oil Company (NOIC); that will allow them to access foreign currency through a special facility backed by the letters of credit at the back of which we then sell the fuel in Zimbabwe dollars,” said Finance and Economic Development Minister Professor Mthuli Ncube to Parliament recently.

The RBZ Governor has ensured this facility is designed to discourage abuse of the Reserve Bank of Zimbabwe Foreign Currency Auction System.

Government is setting up a separate foreign currency allocation platform for petroleum companies that sell fuel using the Zimbabwe dollar to increase the number of outlets doing so.

Already, the Government has invited petroleum companies to register under the scheme, with 57 outlets having listed.

“There are fuel companies that access foreign currency from the auction then claim that they will sell the fuel in Zimbabwe dollars but then they go on to sell it in US dollars,” said Prof Ncube.

“We are aware of this and we have changed the system.

“What we are doing now is, we have said that any designated companies and service stations that wish to sell fuel in Zimbabwe dollars, and we have carefully chosen these, will be supported through a different system rather than the auction,” the treasury boss added.

Fuel prices skyrocketted recently going unstable as a result of global supply gaps caused by the ongoing war between Russia and Ukraine.