Fuel crisis looms for gov’t

The Ministry of Transport and Public Works warned this week that it was unable to obtain fuel from suppliers because it was also unable to pay for it. It also emerges in a savingram that the ministry wrote to various ministries and departments that the government is paying almost two-and-a-half times for fuel stocks since the Russian/Ukraine conflict started.

The Ministry of Transport and Public Works indicated that CTO was struggling to raise enough funds to pay suppliers because ministries and departments can only supply a quarter of the required funds. “The recent fuel price increases largely fuelled by the Ukraine-Russia war have dealt a huge blow to the government fuel budget for the current financial year,” the ministry’s permanent secretary, Kgomotso Abi, said in a savingram.

Abi noted that prior to these price increases, the average total monthly fuel expenditure was P20 million. “This has risen to about P40 million per month,” he said, adding that a “situation of low fuel stock levels at various CTO fuel points currently pertains mainly due to depletion of funds available to CTO to procure fuels.” He disclosed that the situation arose as a result of failure by various government entities to avail funds even where CTO has raised invoices. “For example, CTO during the period 1^st April 2021 to August 2022 billed various government entities a total amount of P156,613,792.14 and only P41,122,778.40 was paid,” he said.

“As a consequence of the above, some of the CTO fuel points have dried out and the national stock levels can only cover about a week. CTO has only an unspent balance of P5, 697.09 for fuel.” The savingram then makes that stark warning that the situation points to an “undesirable” and “imminent” fuel shortage that should be avoided. “You may be aware that in the past financial year, CTO engaged the various ministries to do payments in the same manner due to shortage of the procurement of fuel for the Government fleet,” it says and calls for all fuel budgets for various ministries to be availed for CTO to continue to procure fuels.

“Failure to accede to the request above might result in undesirable consequences of total unavailability of fuel to ministries and departments or limited fuel availability leading to rationing of fuel with those outstanding payments being denied fuel services,” Abi said. “Such a situation will be calamitous as essential services such as health facilities will be adversely affected.” He called on ministries and departments being supplied by “the CTO fuel suppliers (to) submit Letters of Authority (LAs) to CTO as CTO could only raise Government Purchase Orders to the suppliers after confirmation of availability of funds.”