A Kenol Kobil fuel station in Remera, Rwanda. Kenya's KenolKobil and South Africa's Engen, a subsidiary of Malaysian parastatal Petronas
are two big investors that have been damaged by fuel shortages in
Burundi. FILE PHOTO | NMG
Fuel shortages have paralysed the small
central African nation of Burundi, threatening further damage to an
economy already moribund after years of political violence and raising
questions about the role of the country's only oil importer.
The problem has damaged two big foreign investors, Kenya's KenolKobil
and South Africa's Engen, a subsidiary of Malaysian parastatal Petronas.
The
shortages, which forced the government to introduce rationing on May
16, have paralysed commerce and caused food prices to jump by around a
third, raising the prospect of a wave of economic migration.
More than 400,000 people have already fled Burundi into the volatile central African region.
Declined questions
Anti-corruption
campaigners said the fuel shortages became severe after Burundian
company Interpetrol Trading Ltd received the lions' share of dollars
that are allocated by the central bank to import fuel.
"The
oil sector is undermined by favouritism and lack of transparency,
because the rare hard currency available in the central bank reserves is
given to one oil importer," said Gabriel Rufyiri, head of anti-graft
organisation OLUCOME.
The central bank declined to answer Reuters' questions.
Interpetrol's
lawyer, Sylvestre Banzubaze, said: "I am not associated with the
day-to-day operations and only intervene on legal questions. You should
address your questions directly to Interpetrol sources."
He did not respond when asked for further contacts and the company does not have a website.
Rufyiri
said that government sources told him that the bulk of dollars for fuel
purchasing had been allocated to Interpetrol since March this year.
Reuters confirmed with two other sources that Interpetrol received the bulk of dollar allocations.
Small fraction
Other companies only received a small fraction of the dollars they needed, the sources said, severely damaging their businesses.
Earlier this month, South African petrol company Engen confirmed it had sold its assets in Burundi to Interpetrol.
Engen
declined to comment further. KenolKobil also declined to comment, but
Burundian citizens say most of their petrol stations have been closed
for three months.
Interpetrol is now the sole oil importer and runs all the fuel storage tanks in the country, said an industry source.
Banzubaze said there was "no link" between Interpetrol's shareholders and any member of the government.
But
a 2011 US State Department report described attempts by senior
government officials to pressurise judges into dropping a corruption
case against the company, owned by brothers Munir and Tariq Bashir.
Neither the government nor Interpetrol's lawyer responded when asked about the status of the case.
Aid cuts
Government
officials blame dollar shortages on aid cuts that donors imposed after
President Pierre Nkurunziza ran for a third term in 2015, triggering a
wave of political violence.
"These days, fuel importers
don't get enough dollars to bring petroleum products," said Daniel
Mpitabakana, the government's director of fuel management.
Burundi's
economy shrank by 0.5 percent last year, and the International Monetary
Fund expects no growth at all this year and 0.1 percent next year.
Black
market prices for fuel range between 5,000 to 6,000 Burundi francs per
litre, vendors said, double the official price of 2,200 francs.
The
street exchange rate is 2,600 francs to the dollar, although it is just
over 1,700 to the dollar at the central bank. Only the central bank can
receive dollar deposits and allocate dollars to businesses.
In
the capital, queues at empty petrol stations snaked around the block.
One civil servant said he had taken the last three days off work to
search for gas.
"I have no fuel for days and I don’t know if by chance will get it today," he said, asking not to be named.
Drought and instability
Burundi has also been battered by drought and almost two years of political instability.
Hundreds
of people were killed and hundreds of thousands were forced to flee
abroad during the political violence, which still sometimes erupts in
low-level clashes.
Almost 3 million of Burundi's 11 million citizens are dependent on food aid, the UN says
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