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Fuel Coupons on way out

Staff Reporter 18-05-2009

Fuel coupons, the once hot pieces of paper may be on their way out as fuel availability continues to improve.

One player in the oil industry, Comoil, has already taken the move to cease the use of fuel coupons. Comoil has announced that it would not honour any coupons as they had decided to discontinue the use of the coupons. Those with coupons have been asked to redeem them at Comoil offices and get their cash equivalent.

This move, which is likely to be followed by other players in the oil industry, is a logical response to the changes which have been ushered in by the shift to a liberalised economy. Whereas the oil industry was liberalised almost two years ago, there were some bottlenecks which elbowed the smaller players out.

At the height of the fuel crisis in the country, it was decided that fuel coupons be used. These coupons operated on a very simple system where a consumer buys fuel in the form of coupons. When the need to use fuel arises, the consumer would go at the designated filling station then get the fuel equivalent of the value of the coupon.

This system worked well to rationalise the fuel industry which was now at the brink of collapse and was going unregulated with a huge number of people offering to sell the precious liquids from containers. However, the system was also being abused as some people hoarded the coupons for speculative purposes.

An economist with one of the mobile phone networks said the decision to discontinue the use of fuel coupons would not have any material effect on the availability of the commodity on the market.

“In fact, it is a wise decision as the system was very strenuous because a company needed to print the coupons with security features and this cost a lot of money. Over and above the cost of production, one has to reckon that the coupons were also being stolen and almost every issue of the daily newspapers had notices of stolen coupons. And finally, now that the fuel is now available on the market, then it is high time that we went back to the normal situations when one carries cash not coupons for fuel,” said the economist.

The shortage of fuel as a result of the economic problems in the country saw a number of traditional players scaling down on their operations while new players came to establish themselves.