Zim revels in global oil sector crisis

FINANCE minister Mthuli Ncube has conceded that Zimbabwe will come out of the COVID-19 pandemic heavily bruised and with a negative economic growth, but said there were positives to be drawn from the crisis

BY MOSES MATENGA

In an interview last week, Ncube said the global pandemic had affected economies, particularly in the energy sector, but for Zimbabwe, at least there was a positive since it has led to a reduction in fuel prices.

“But we have benefited when it comes to the oil sector because oil prices have come down and we are a net oil importer, so that is a positive. But generally, if you look at the global supply chain in terms of raw materials from China and everywhere, that has been impacted and that has contributed to the economic slowdown,” Ncube said.

His comments came as global oil players have been hard hit by the COVID-19 pandemic that has killed more than 345 000 globally and infected more than 5,44 million people.

Coronavirus travel bans, according to the World Bank, have led to an unprecedented drop in demand for oil and demand is expected to fall by 9,3 million barrels a day.

Prices have fallen sharply, below zero in some cases because of lack of demand and observers said the world would again see a drastic fall in global crude oil prices.

The demand for the commodity is so low at the moment that oil-producing countries are running out of space to store crude oil and may have to look at further cuts if demand outlook does not improve.

Ncube said COVID-19 has impacted all economies globally and the situation was not unique to Zimbabwe.

“So, globally we are being impacted because we are a commodity price producer so it has impacted that on that side. The other channel is through the tourism sector, where we have seen the sector slowing down because the tourists’ arrivals have been impacted (as there are no commercial flights) around the world,” he said.

Though oil prices have gone down globally, the fuel crisis has refused to go away in Zimbabwe as the commodity continues to be in short supply.

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