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.
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:
- 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.
- 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.