Panic buying and a stayaway as Zimbabwe fuel price bites

14 January 2019 - 07:21 By James Thompson
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Unions have called for a national stayaway in ZImbabwe following a massive fuel price hike.
Unions have called for a national stayaway in ZImbabwe following a massive fuel price hike.
Image: Theo Jeptha

A national stayaway kicked off on Monday in opposition to Zimbabwean president Emmerson Mnangagwa hiking fuel prices by 120 percent on Saturday January 12 2019, a move which sparked panic buying, with the public speculating on a sharp increase in goods and services across the board.

Social media went into overdrive with “Bring back Mugabe” memes after the president’s announcement. During his 37-year stint in power, Mugabe did not, at any point, go on national television to announce a fuel price hike. The pro-Mugabe calls subsequently waned as people recalled his policies.

The new pricing is seen by many as the beginning of a tough year under president Mnangagwa, who after the military transition in November 2017 was buoyed by goodwill locally and internationally, but has so far struggled to improve the country’s finances.

By close of business on Sunday, some basic commodities had started disappearing from shelves in supermarkets. In some cases, grocery store owners removed products from shelves or directly increased prices, while in others the buying public bought in bulk.

“If we sell at this price, in a few days’ time we won’t be able to restock. Transport costs have shot up and it simply means to have sugar coming here (at the shop) it will be at a higher cost. It’s not workable,” said Tapiwa Ngorima, a shop owner.

Petrol went up to $3.31 a litre, from around $1.46, and diesel now costs $3.11 a litre, from $1.26 in bond currency.

However, for some fuel station operators, it’s a loss.

“The same capital that procured fuel at the old price will be used to buy in the new price regime. For most of us, we are operating at a loss. Only rogue dealers will survive this because government notified us early that we should sell all our fuel and wait for the new pricing. Imagine if I had held on to my old stock and decided to sell with the new price, I would at least be cushioned,” said a fuel station operator.

To try to calm tempers, government moved its workers' pay dates back by two weeks, with the army, police and heath sectors getting paid on Monday January 14 and the rest of the civil service getting paid on Wednesday. Their salaries are expected to reflect a 10 percent increment, which has been rejected by unions.

“How do you explain a 120 percent fuel hike and a 10 percent salary increment? Public transport operators are now demanding $2.50 for a one-way trip, from $1. There is no balance there,” said a nurse.

Deputy minister of Information, Publicity and Broadcasting Services Energy Mutodi gave a few tips, via his official twitter account @energymutodi, on how to survive the fuel crisis.

“Faced with high fuel costs, clever people know what to do & here are some tips: Avoid fuel guzzler, reduce fleet, cancel unnecessary trips & use bicycles where possible to save BIG. Do not protest in the street you can lose a limp (sic) in skirmishes,” he tweeted.

With the festive season gone and most companies expected to resume operations, some have extended their annual festive season shutdown until the economy improves.

Leading cooking oil, soap and margarine manufacturer Olivine Industries has closed shop because of its failure to service a US$11m debt. The company said its failure was due to the crippling economy.

“The board of directors and management of Olivine Industries (Pvt) Ltd regrets to advise its customers that all manufacturing operations have stopped. The company has struggled to restart its manufacturing operations in January 2019 for lack of imported raw materials. As such it remains closed after the shutdown in December 2018 and employees have been sent on indefinite leave.”

“Production during the remainder of 2018 struggled at low capacity due to shortages of raw materials procured through letters of credit established before September 30 2018 and on foreign supplier credit which were last serviced in 2018. The company currently owes US$11m to its foreign suppliers who have since cut off supplies until the arrears are paid,” reads the company’s statement.

The Zimbabwe Congress of Trade Unions (ZCTU), a militant workers union body that gave birth to the Movement for Democratic Change (MDC) in 1999, announced that, after wide consultations, a national stayaway had been called for Monday to Wednesday January 16 in protest against “the insensitive and provocative” fuel increase.

“Workers have been facing serious hardships as a result of the general astronomical price increases since last year against stagnant salaries. The fuel increase added more misery to the suffering working class of Zimbabwe both in formal and informal sectors," the union said in a statement shared on social media.

“The (stayaway) action will be embarked on an incremental basis and include other forms of actions that will be advised in due (course). There is nothing else pushing the workers besides the starvation and hardships afflicting every working-class household,” said ZCTU.

Meanwhile, president Mnangagwa left the country at the weekend for a five-nation visit that will take him to Russia, Belarus, Azerbaijan, Kazakhstan and Switzerland, where he will make a second appearance at the Davos World Economic Forum. Besides Russia and Switzerland, the other destinations have little or no trade relations with Zimbabwe other than Memorandums of Understanding.

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