via Fuel firms accused of profiteering 22/11/2014
THE Zimbabwe Energy Regulatory Authority (Zera) is auditing fuel firms as it tries to establish the correct pricing for fuel in the economy, an official said on Friday.
Oil companies stand accused of profiteering as fuel prices in the country have largely remained unchanged while international oil prices have dropped by about 30 percent since June.
Petrol prices are ranging between $1.47 and $1.56 per litre while diesel is costing between $1.36 and $1.46 per litre.
But locals have questioned why local companies are non-responsive to global changes which is not the case in neighbouring countries.
Local fuel companies are only known for adjusting prices upwards but rarely, if ever, reduce them regardless of what happens on the global market.
Zera chief executive engineer, Gloria Magombo told journalists on the sidelines of a meeting with the fuel sector that the regulator would conclude the audit before the end of the month which will be used in mapping the way forward.
“The prices differ depending on where they (fuel companies) are sourcing the fuel and it also depends on volumes,” Magombo said.
“But we are auditing them to see what exactly is the price at which they are buying the fuel. We have already audited four or five big companies.”
Experts in the sector estimate that oil companies are on average currently importing fuel, both petrol and diesel, at prices below $0.75 per litre.
But during the meeting, players in the sector said it was impossible for fuel prices in Zimbabwe to automatically adjust to drops in international prices due to the country’s peculiar circumstances.
“It will be folly of us to expect an alignment to international price movements,” said ComOil managing director Lovemore Mazero.
“This is because of the challenges that we are facing as an economy, some of which are not related to international prices.”
Some of the challenges, he said, included high transportation costs.
Other players said oil companies had bought stocks in advance at higher prices and as a result could not slash prices based on changes on the international scene.
“Some want to try and recover from the past thin margins so they do not immediately reduce prices,” said one player.
Others played on the fact that Zimbabwe was a landlocked country, as a result it could not do what countries such as South Africa and Namibia, which are closer to ports were able to do.
But Magombo said the fact Zimbabwe was landlocked could not be used as an excuse as the same oil companies in the past used to adjust prices, up or down, in reaction to international price movements.
“If it used to happen in the past, why can’t it happen now,” she queried.
She said oil companies must also be fair to consumers who were also very much aware of what is happening on the international scene.
COMMENTS
These new oil companies run by those heavily connected to these corrupt politicians are not telling the truth.Our country is selling E10 and above,therefore fuel should be cheaper than what it is at the moment even if we factor in all their so-called inputs required to bring it into the country.The problem with our business people is that they want at least 100% profit because our legalised bodies tasked with monitoring these people are also big suspects or they lack knowledge and courage to act decisively.Our vehicles are being damaged by these unscrupulous people who do not stick to E10 because they blend the fuel for easy profits because the higher the percentage of Ethanol used should make the blend less expensive but the opposite is true in our case.Why? Answer is just simple greediness and no care for the suffering customers.
Our consumer council is a complete toothless body not worth existing.
Wow you have just realized this now!World prices have been down for some time now!The only people in this country making money are the fuel people because no one else is!I think most of them are politically connected!Another reason Zim will never come right!
The same companies who does not adjust fuel price according to reduction will find it easy to adjust it upward regardless of having bought the fuel at lower price, case being replacement cost. But when the replacement cost goes down they use purchase cost. So i essence they are not sensetive to their consumers because of greediness and political connections. Secondly the E10 or ethanol blend fuel must be even cheaper than it is in other countries because all fuel in Zimbabwe is complusorily blended. That means its even easier to administer. The fuel companies are run bu corrupt politicians with the same sturbboness as the master
The same companies who does not adjust fuel price according to reduction will find it easy to adjust it upward regardless of having bought the fuel at lower price, case being replacement cost. But when the replacement cost goes down they use purchase cost. So i essence they are not sensetive to their consumers because of greediness and political connections. Secondly the E10 or ethanol blend fuel must be even cheaper than it is in other countries because all fuel in Zimbabwe is complusorily blended. That means its even easier to administer. The fuel companies are run bu corrupt politicians with the same sturbboness as the master.
Where is the audit, ZERA???