Zim fuel price highest in Sadc
Source: Zim fuel price highest in Sadc | Daily News
HARARE – Fuel costs in Zimbabwe are still much higher than anywhere else in the region even after government decreed fuel retailers to cut the price of petrol and diesel by up to 7,5 percent after a tax cut, economic experts have said.
High fuel prices have caused the costs of goods in the shops to stay too high, and the latest edict is part of a drive by the new government of President Emmerson Mnangagwa to slash prices that had rocketed ahead of a key general election due in four to five months.
The slash was also designed to absorb the impact of rising international fuel prices after the consolidation of crude oil prices which consequently followed Organisation of the Petroleum Exporting Countries (Opec)’s supply cuts.
Energy and Power Development minister Simon Khaya Moyo said on Tuesday last week the government had fixed petrol price at $1,35 per litre, down from $1,41 while a litre of diesel now retails for $1,23 from $1,33.
The price cut came just after government had slashed the import duty on fuel by as much as 17 percent.
“I expect and trust that this important decision by the government shall be implemented by all concerned parties. I therefore expect nothing less than immediate compliance,” Khaya Moyo said in a statement.
Key industry representative bodies the Confederation of Zimbabwe Industries (CZI) and Zimbabwe National Chamber of Commerce (ZNCC) responded to government’s move to lower excise duty on fuel imports by issuing a collective statement saying it shall incorporate fuel price reduction into its pricing structures, which will result in the pricing of some basic commodities falling by ranges of 1 percent to 5 percent.
It went further projecting that after this cut, the overall consumer price index will fall further from the 1,2 percent increment experienced over the 2016-17 period.
Financial research firm Equity Axis said on the surface, it clearly is rational and typical for business to inform its pricing using the cost structure as a basis thus implying that a variation in cost may result in price shifts all else being constant.
“In order for one to appreciate inflation behaviour, an appreciation of its background and causatives is also important and this notion appears to elude ‘industry bodies.’ It is with shock that industry wants Zimbabwe to appreciate that it can now solve inflation or ensure price stability after government’s excise duty cut on fuel,” Equity Axis said in a commentary.
“The average increases in the price level up-to three weeks ago, had absolutely no relationship to fuel prices.