Business cheer fuel price reduction

September 15, 2015 in News

Consumers and the business sector say government’s directive to reduce the price of fuel will result in the reduction in prices of goods and services.

BY TARISAI MANDIZHA

Government recently directed fuel players to reduce petrol and diesel retail prices by seven cents and five cents, respectively.

The directive also made applicable margins for wholesale and retail an absolute six cents per litre instead of the current provision of 7%, which varies margins unnecessarily for operators when external factors change.

Zimbabwe National Chamber of Commerce president Davison Norupiri said the intervention by government was long overdue as prices for fuel on the international market have been going down together with the prices of related products.

“South Africa has reduced fuel prices three times and instead our prices have been increasing. Government has taken the right decision because petroleum players were not playing ball as in other countries fuel prices are going down,” Norupiri said.

He said the petroleum industry should sit down with government and air its views on the developments in their sector.

Norupiri said prices were going down in the region, making Zimbabwean exports less competitive.

Consumer Council of Zimbabwe executive director Rosemary Siyachitema said any reduction in prices in relation to what is happening in our economy was welcome.

“This means consumers can keep some extra money in their pockets for other things. The fuel reduction is in line with the international prices and it’s a good thing we are moving in line with what is happening world over,” she said.

“Fuel prices impact on prices for products in supermarkets, transports cost and other services, it is our hope that we will soon see a price reduction.”

Confederation of Zimbabwe Industries president, Busisa Moyo said there was need for government to conduct a national exercise to address the issue of costs as a number of products and services are overvalued.

“So many product prices are too high, there is need to look at the cost drivers and there is need for a price correction, international revaluation across the economy to bring prices from the old time high because the prices are affecting the country’s competitiveness,” Moyo said. “Any downward movement of prices is welcome because currently our economy is overvalued.”

Economist John Robertson said prices of goods are generally expected to decline due to fuel price reductions.