Total Fuel Station and the separate fuel pump pricing…

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Over the weekend, Zimbabwean social media was abuzz with photos of Total Fuel Station charging its customers in US dollars. Many feared that 2008 had come back and that this would be the onset of fuel ques.

Here’s my take on it and why I think people should not fear, as well as why they should be scared.

It’s not the full picture

Just the sharing of that one picture doesn’t paint the full picture. Total (well, the two fuel stations I went to that I saw the signs at) have separated their fuel pumps to have one side that sells in US dollars, while the other takes Bond Notes and bank cards (“basically local currencies“). So essentially, Total have not scrapped the bond note and started charging in US dollars only, but have separated their fuel pumps.

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It’s not all Total Zimbabwe fuel stations

A drive around Harare this morning (Monday 13 March 2017) showed that it was only two of the 5 Total fuel stations that Techzim visited, that had effected the new pricing. The understanding is that Total is a franchise and so is owned by different individuals and hence the dynamics on the ground is different for each, based on what the owners want. A review of the ZERA website shows that as of 31 December 2016, Total Zimbabwe had a 12.48% market share, though what was not readily available was the quantity of fuel that they are selling.

Why Total Zimbabwe may have adopted this new pricing structure

Techzim reached out to Total for a response on this and will update with their response, however, there are a couple of reasons why I think they may be going down this road:

  1. Stop sale of US dollars: Perhaps fuel attendants are selling the US dollars that the fuel station are getting and by separating the pumps, they can easily reconcile at the end of a shift (or the day). However, this hypothesis falls away when you notice that they have bond notes and swiping being sold from the same pump, instead of swiping being coupled with US dollars.
    If one could swipe at the US dollar pump, using their Zimbabwean banking card, then surely all the receipts can be kept and reconciled at day end and there will be no possibility of that cash being “sold”. This is not the case.
  2. Fuel stations import fuel and so my assumption is that when they go to the bank, their transaction is processed fast when they present US dollars. Should they come with bond notes, they’re left to wait on the Reserve Bank to provide the US dollars and due to the country having experienced shortages of “foreign currencies”, that wait essentially affects their business.

Is this 2008 repeating itself?

Many have feared that the introduction of the bond note, will spark a repeat of 2008, fuel shortages et al. What could possibly happen is when someone drives up to Total Zimbabwe fuel station and they are then advised that Total had run out of ‘bond note fuel’ and all there was was “US dollar fuel”.

If you don’t have US dollars, you’ll probably be made to either join a separate que or leave the fuel station “totally”.

Techzim also reached out to the Reserve bank of Zimbabwe in regards to this article and were advised that an investigation will take place and they’ll get back to us – check back for that update.

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13 Comments

  1. Tich Morange says:

    Mangudya can’t play musical chairs forever. The chairs are getting fewer and fewer…at some point the music is gonna stop! Hello 2008!

  2. Zoe says:

    I went to a Total service station this morning. I had my money split between US and Bond notes cash. The US pump was not being used and I asked the attendant how he would factor in my US $ since he was using the Bond note/Ecocash note. Imagine my embarassment when he directed me to check the pricing. It was the same on both pumps. I think this article would be improved by quoting the different prices where they actually exist.

    1. William Chui says:

      Sorry for not making that clear, yes, the pricing is the same, no discount if you use USD.

  3. tc says:

    only Total, Trek started this ages ago. I can assure you (with the benefit of my qualification that allows me to make such VALUE JUDGEMENTS), darker days are coming. The bringing on of the bond notes was not a cure to the challenges we face as a nation, it was a poor attempt at curing the symptoms. What instrument are they employing to maintain the bond note at par with the dollar? if our exports were truly increasing in line with the more bond notes they are issuing would we have payment challenges on the Nostro?

  4. waito says:

    we’ll. considering that attendants can easily convert USD to bond. or convert bond sale to swipe yes owners will separate. but dark days loo. how dark not too sure.

  5. RASTAS13 says:

    In any economic environment where more is being consumed than produced there is a deficit. That deficit leaves a gap that needs be closed by funding.

    That funding will either be in the form of a government subsidy in this case (as government have been printing fake monies by providing funding via issuing TBs as a short term stop gap) there is no long term funding available from this source, that is essentially broke.

    The next avenue would then be to to approach international donors or funders. As our country hates everyone and will not respect property rights, no international donor or business funding will be made available. (A person who knows you will cut the head off his chicken will probably not lend you his chicken).

    Respect for property rights, a 180 degree about turn on the indigenization policy and a softening of rhetoric toward the west would start opening doors. The fact that we are moving toward an election will make these unpalatable

    In my humble opinion tie everything down, the storm is coming and times are about to get very tough.

    1. uvofo says:

      So the solution is to give the economy back to the white capitalists and foreigners? Get your lazy black arse up and work for country.

  6. Allaz says:

    Some time ago I saw at chicken slice; one employee who was of duty came in and swapped a whole bunch of bond notes for a single 100 USdollar note which was in the till. I think the first scenario in the article is very plausible.

  7. Bill says:

    For those stations that do give a discount for paying in US (6-8 cents a litre) and have pumps exclusively dedicated to US$ sales, has anyone checked to see that the stations are not recalibrating these pumps so that the customer receives a ‘discounted’ volume of fuel?

    1. Anonymous says:

      It’s a good question but this is beyond the means of an ordinary motorist. An attempt could be made by pouring into a 20 litre jerry can but I can assure you that the result will be inconclusive. The consumer is always the loser.

  8. KG says:

    I know speculating on what’s going on at Total made the article longer but how about just talking to Total????

  9. follow says:

    governor said bond notes are not forced

  10. Sagitarr says:

    @Rastas13 – spot on !! I see @Uvofo has replied without offering any solution him/herself. By using USD and calling anything you have “yours” automatically qualifies one as a capitalist. @Uvofo I will come to your house and enjoy your meals and watch TV at your expense what you call “working for your own country” is a lot of hot air aka vapourware. its the type of jingoism our erstwhile rulers have been churning out since 1980, but in this world there is nothing for free, even the air we breathe comes at a premium!!

    The economy should be put in the hands of the best managers we have in Zimbabwe – their colour is immaterial.

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