Fuel prices go down

178

Harare (New Ziana) –Measures that the government put in place to keep fuel prices down to cushion citizens from escalating prices of basic goods and services continue bearing fruit with the Zimbabwe Energy Regulatory Authority (Zera) announcing a further reduction on Thursday.

Global fuel prices have been rising since the start of Russia’s special military operation in Ukraine.

To cushion consumers, the government completely removed the fuel levy on diesel while that on petrol was reduced to US4.7 cents per litre, following a spate of increases.

The timely intervention, effected in June, prevented fuel prices from breaching the USD2.00 per litre mark.

Blending, at 20 percent, has also helped keep fuel prices down.

Zera said the price of diesel was down by 4 cents to US$1.70 per litre while petrol was reduced by a cent to US$1.51.

“The public and operators are advised that the blending ratio remains at E20. Operators may sell the petroleum products below the prescribed prices depending on their trading advantages and should display prices in a prominent place as provided for by the fuel pricing regulations,” Zera said in a statement.

The government is on record expressing concern that the business sector was not reducing prices for goods and services in tandem with falling fuel prices, among other factors.

Energy and Power Development Minister Soda Zhemu recently told New Ziana that the government expected business to adjust pricing in line with the drop in fuel prices, and stabilised exchange rates, among other factors, to ease the financial difficulties consumers faced.

Zhemu said the business sector was always quick to adjust prices upwards whenever the price of a key input, such as fuel, was increased.

“What we have seen in the past is that when the price of fuel increased even by a single cent, business would increase prices of basic commodities,” he said.

Fuel prices are a major determinant of pricing in business, and these have been rising much of the year due to the Russia-Ukraine conflict.

But since early July, fuel prices have been dropping after the market absorbed the initial shock of the war.

In shying away from responding to the fuel price falls correspondingly, the business sector instead started citing high inflation and rapid devaluation of the local currency, among other things, as the new justification to keep increasing prices for goods and services.

This, too, has now been addressed by government, with both inflation and exchange rates either stabilised or reversing, but business still has largely kept its pricing north.

“Now that the price of fuel is going down, we do not seem to see that reflected in the prices of goods and services, and it is actually a concern. They should pass the benefits accruing to the consumers just as they were doing when things were difficult. Why not now?” Zhemu asked then.

New Ziana

Comments are closed.