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Zimbabwe Runs Short of Fuel - 2004-09-01

Fuel shortages have resurfaced in Zimbabwe after an eight-month period of easy supplies.

Economists say that, despite government assurances that Zimbabwe is on a path to recovery, the economy continues to decline. They say that, while measures taken by the Central Bank to make hard currency available for oil imports have been successful, they will be insufficient to cover the rising prices of fuel imports.

Both Harare and the second-largest city, Bulawayo, are experiencing fuel shortages that did not improve, even though suppliers raised prices by about 10 percent this week.

Economist Tony Hawkins says the shrinking economy and the rocketing cost of crude oil are pushing Zimbabwe to a point where it will run out of currency reserves to pay for imported fuel and other commodities.

And Masimba Kambarami of the Petroleum Marketers Association says he does not see the situation improving anytime soon. Mr. Kambarami said the increase in the price of crude oil means Zimbabwe has to find more foreign currency to buy the same amount of fuel.

Other importers say that many of the newer, smaller fuel dealers can no longer get credit from South African suppliers, and are being asked to pay for deliveries in advance.

The government previously imported fuel mainly from Libya and South Africa, but both countries halted sales to Zimbabwe more than a year ago when Harare failed to pay the bills.

The situation has been compounded by a 75 percent drop in Zimbabwe's tobacco production. Tobacco exports have traditionally been the country's largest source of foreign currency, earning at their peak five years ago about 40 percent of the total. The shortage of fuel is the most visible sign that the economy continues to fail. Economists say without energy, Zimbabwe's faltering economy will continue to decline ever faster.