Thursday, May 31, 2018

Govt clueless on dealing with fuel price hikes

Views
Fuel prices continued on an upward trend in the past few days, with authorities seemingly groping in the dark on how to respond to the issue.
BY TATIRA ZWINOIRA
The price of petrol and diesel rose by a cent this week to $1,42 and $1,29, respectively, in Harare, while fuel is slightly more expensive in other cities.
In emailed responses to NewsDay late on Tuesday, Zera chief executive officer, Gloria Magombo said there was nothing untoward with the price increases, as this was driven by external factors.
“Most countries are experiencing a rise in petroleum prices due to an increase in crude oil prices internationally,” she explained.
“Differences in the price movements are due to a number of reasons such as foreign currency fluctuations, subsidies embedded in their pricing models in some countries, different market structures, for example, the presence of refineries, distance from ports for landlocked countries, size of markets (larger countries enjoy economies of scale), different taxes and levies, and different price stabilisation mechanisms.”
While fuel prices in Zimbabwe are spiralling, threatening inflation, other governments in the region have stepped in to curb the prices of fuel from rising further in their countries.
Only last week, the Zambian Energy minister Matthew Nkhuwa said the neighbouring country planned to keep the price of fuel stable for the foreseeable future, raising the spectre of subsidies.
The price of petrol and diesel per litre has been averaging $1,38 and $1,20, respectively, in Zambia.
In Malawi, prices have remained at $1,14 and $1,13, with the government using a price stabilisation fund to keep the prices in check.
In South Africa, prices are on the rise, but not as much as Zimbabwe.
Petrol is averaging $1,19 while diesel is $1,07 per litre.
Last Friday, Energy and Power Development ministry secretary, Patson Mbiriri said there was nothing the government could do to reduce the fuel prices, while central bank governor, John Mangudya warned that fuel prices could continue on an upward trajectory.