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Zimbabwe Set to Renew Libya Fuel Contract - 2002-09-10

Zimbabwe's information department says President Robert Mugabe is expected to renew a contract with Libya for another year's supply of fuel. The deal is said to be worth about $360 million.

In the past few weeks, fuel has regularly run short around the country. An official at a major petrol station in Harare said fuel deliveries are becoming increasingly erratic.

Zimbabwe gets most of its petrol and diesel from Libya and pays for it in local currency. Zimbabwe has no foreign currency and the government would not be able to import fuel if it had to be paid for in foreign currency.

But Zimbabwe could still be facing fuel shortages, even with the new agreement. Libya transports the fuel to Mozambique by ship, and it is then pumped from the port of Beira to Zimbabwe. Pumping costs, port dues, and other costs incurred in Mozambique have to be settled in hard currency.

A shipping official in Beira says Zimbabwe has struggled recently to pay its bills to Mozambique and so, increasingly, the fuel has been detained at the port.

Mr. Mugabe's dependence on Libya extends far beyond fuel. He and most government leaders are banned from traveling to America or the European Union.

Mr. Mugabe can still travel to the United Nations. But the only way he can get to the meeting of the General Assembly, later this week in New York, is in a plane provided by Libyan leader Muammar Gadhafi.