Fuel Crisis Intensifies

UNCLAS HARARE 000873

SIPDIS

SENSITIVE

STATE FOR AF/S
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
USDOC FOR 2037 DIEMOND
PASS USTR FLORIZELLE LISER
TREASURY FOR ED BARBER AND C WILKINSON
STATE PASS USAID FOR MARJORIE COPSON


E. O. 12958: N/A
TAGS: ECON EPET PGOV EINV ETRD ZI
SUBJECT: Fuel Crisis Intensifies


1. (U) Summary: Zimbabwe's fuel supply continues to
worsen. Most motorists are grounded, importing their own
or buying it at exorbitant black market prices. End
Summary.


2. (SBU) Even though the GOZ has increased the leaded
fuel price 6-fold since February, it is still unable to
pay a diminished subsidy of around 25 percent. Official
fuel imports have dwindled to a trickle. The Caltex
(ChevronTexaco) rep responsible for Harare told us he has
been receiving 20-25,000 liters/day, while one of his 20
stations could easily sell 100,000 liters. Some
Zimbabweans now leave cars 2 weeks in fuel lines. At the
same time, there is a burgeoning black market for fuel,
with prices presently around US$.85 and occasionally
reaching US$ 1.40 per liter - 3-to-5 times the official
price.


3. (SBU) The Caltex rep claimed the GOZ's latest scheme -
still unannounced - will limit motorists to 30 liters per
"fill-up." While this will not add to the country's fuel
supply, it will spread it more broadly. It will also
make it possible for service stations that receive a
delivery of, say, 5,000 liters to count off the 167 cars
in line that will get their share, then inform the other
drivers that they are out-of-luck. (Many Zimbabweans are
frustrated spending hours/days in fuel lines only to
watch the pump run dry just before their turn.
Occasionally, violence ensues.) The 30-liter limit will
also prevent drivers from outfitting cars with ultra-
expanded tanks. (The Caltex rep witnessed one small
truck with a 600-liter tank - quite an engineering feat!)

Comment
--------------

4. (SBU) Flummoxed Zimbabweans don't seem to have a clue
why they are paying Z$ 1200-2000 for the same liter that
cost Z$ 74 as recently as November when Libya was giving
it away. Locals who earn Z$150,000 (US$100)/month and
consider themselves solidly middle-class are just
beginning to realize they lack the wherewithal to own
cars, even use public transport in excess. The speed of
their downward mobility is dizzying.

Sullivan