Massive fuel price hike imminent

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Massive fuel price hike imminent

ENERGY and Power Development Minister Fortune Chasi has hinted that a massive fuel price hike is looming as the commodity is currently heavily subsidized while also barely available on the market.

 Energy & Power Development Minister, Fortune Chasi

In an interview with  Zimbabwe Television Network (ZTN) on Friday, Chasi said the current price of around ZW$30 per litre (about US$0,40) is heavily subsidised and not market-led considering the cost of import.

“In the past few weeks, fuel (prices) had gone down considerably and there was fuel dumping but we knew that it wasn’t long-lasting. We will take the necessary measures to correct the situation,” he said.

Chasi also said some petroleum producers were arguing that fuel prices were supposed to correspond with the price of bread.

“I have been away but these discussions have been going on. Some are equating it to the price of bread and so forth. But let me talk to Mazambani (Eddington, the acting Zera chief executive) and get back to you,” he said.

Zimbabwe’s fuel is considered the cheapest in Southern Africa.

Motorists are currently paying $28,96 per litre of petrol, while diesel is retailing at $24,93 per litre. In US dollar terms, at parallel market rates, this is equivalent to US0,37c and US0,32c, respectively.

South African motorists have to fork out US78 cents for a litre of both petrol and diesel, while Zambia sells a litre of petrol for US0,96c and diesel goes for US0,85c per litre.

In Mozambique, petrol trades at US0,92c per litre, while diesel is pegged at US0,86c. Fuel shortages have worsened in recent weeks.

Although motorists have been queuing for the product, petrol and diesel availability remained constrained mainly due to unsustainably low prices, foreign currency shortages and arbitrage.

Fuel stocks are available to last the country a month but can only be released by local and international traders once they are paid for.

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