Fuel prices up 22pc

Source: Fuel prices up 22pc | The Herald July 23, 2019

Tawanda Musarurwa and Leeroy Dzenga
The Zimbabwe Energy Regulatory Authority (Zera) has implemented a 22 percent increase in the prices of petrol and diesel, respectively.

Zera announced yesterday that a litre of petrol will now cost $7,47, a 22,4 percent jump from $6,10.

Diesel now costs $7,19 a litre, a near similar rise to the petrol increase at 23 percent.

“Please be advised that the fuel prices effective Monday, July 22, 2019, are as follows: Diesel $7,19, Blend E20 $7,47,” said Zera in a notice.

Zera CEO Eddington Mazambani told Zimpapers Television Network that an upward review was inevitable due to an increase in handling costs.

“There are two issues, Free On Board (FOB) costs have increased and they are denominated in United States (US) dollars.

“These are global charges and are beyond our control,” he said.

Free On Board costs are costs incurred by an importer to ensure that goods are delivered to them within specific times and using agreed routes.

FOB costs carry components like insurance and places the liability of damage with the seller until delivery.

The latest fuel increase is the second such in as many weeks.

The regulator maintains that announcing of new fuel prices regularly is not a new principle.

“If you remember during the US dollar days we used to announce price increases almost every week. But the difference is, these numbers are now appearing to be big in our local currency,” said Mr Mazambani.

Finance and Economic Development Minister Mthuli Ncube is on record saying that Zimbabwe’s fuel prices are low, in view of the fact that the official foreign currency exchange rate is currently around 1: 8,88 between the United States dollar and the Zimbabwe dollar.

This being the case, the new price of fuel remains below US$1, making it among the cheapest in the region and internationally.

Experts says all things being equal, the price of fuel should increase to a point where it at least matches regional and international averages, which will also help in curbing arbitrage.