Source: PetroTrade shuts down 5 fuel stations – NewsDay Zimbabwe
BY CHIEDZA KOWO
STATE-RUN oil firm, PetroTrade Limited will be shutting down five of its fuel stations across the country between February 9 and March 30 this year to make way for the return of the assets’ proprietors, chief executive officer Godfrey Ncube told NewsDay Business yesterday.
Ncube said it was possible that the landlords, who he could not disclose, were seeing fresh market opportunities they would like to exploit.
Oil firms have recently been given the greenlight to import fuel and trade in foreign currency.
Business has been booming in the industry, with several importers turning the corner following many years in which they were compelled to trade in the domestic currency.
Many fuel importers went bust during the Zimdollar era because after trading, they failed to raise enough Zimbabwe dollars to buy foreign currency to import more stock.
In a market update yesterday, PetroTrade said fuel stations in Chipinge, Bulawayo, Chitungwiza, Chivhu and Graniteside in Harare would be affected.
He dispelled speculation that the firm had collapsed under dire financial straits after facing stiff competition in a liberalised market.
He said PetroTrade still had 30 fuel stations which were operational.
“We have not closed down our operations,’ Ncube told NewsDay Business.
“The landlord is claiming the assets back. Maybe they are seeing some opportunities in the market,” he said.
The new development at PetroTrade contrasts with the firm’s earlier plan to expand across the country and dominate the rural market.
In 2019, PetroTrade said it was exploring strategies to grow its market share beyond 10% under a plan that would see it expanding to less-serviced rural communities.
Ncube told our sister paper Standardbusiness at the time that PetroTrade’s market share was too small and an aggressive footprint expansion beyond urban areas was underway.
“The future plan is to grow the company. We want to be the company that supplies fuel to different parts of the country,” he said.
“Our aim is that probably in the next three or so years, PetroTrade is there in every district in Zimbabwe.
“We want to ensure that we are operating in every district, even in the rural areas. Currently we have four projects that are running up at the same time.
“We have a project in Mabvuku (Harare) that is almost finished, we have got one at Warren Park (Harare), we have got a project in Bindura that is about 35% complete, we also have a project in Masvingo that is running at about 30% or so complete, we also have a project that is about to start at Epworth (Harare).”
At the time, Zimbabwe was facing an acute shortage of fuel due to foreign currency shortages.
As such, government made a deliberate move to liberalise the fuel sector by allowing operators to make direct imports for the precious liquid in order to increase supply.
Ncube said PetroTrade was sourcing foreign currency from the interbank market and the Reserve Bank of Zimbabwe (RBZ) to import fuel.
“We are sourcing foreign currency through the interbank market although the foreign currency allocation for fuel is a bit lower,” he said.
“We are also being assisted by the RBZ in sourcing foreign currency, specifically for fuel.”
Fuel price hikes have recently been a cause for concern in Zimbabwe.
Prior to the February fuel prices review, the government had increased fuel prices in January by 1,7% for petrol and 3,4% for diesel.
On December 5 last year, Zera also increased the price of diesel marginally to $97,24 and US$1,19 per litre and petrol to $97,44 and US$1,19 per litre.
The frequent increases in fuel prices are likely to trigger a wave of price adjustments across the board and undermine the government’s objective of price stability.
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