Zimbabwe’s fuel price level cannot be compared with other countries as they have different cost structures, the state energy regulatory authority has said.
Reflecting the decline in international oil prices, petrol prices have recently come down from as much as $1.57 to between $1.49 and $1.53 per litre, while diesel now sells at between $1.38 and $1.41 per litre, down from $1.47. The price of oil has hit five-year lows on fears of oversupply.
Brent crude was down $1.77 at $67.30 a barrel in Monday afternoon trading, having earlier ebbed to $66.77 – its lowest since October 2009.
However, there has been criticism that international price fluctuations rarely benefit Zimbabweans, prompting the energy regulator to respond.
“Prices in different countries are affected by different factors and some of them are: government policy on fuel taxes, fuel supply chain structure, fuel stabilisation mechanisms, whether landlocked or not (transportation); subsidies and exchange rate against the USD,” said Zimbabwe Energy Regulatory Authority chief executive Gloria Magombo in a statement.
“It is therefore inappropriate to simplistically compare prices in Zimbabwe against other countries in the region as they have different tax regimes, statutory payments as well as different economies.”
In September, the government increased duty on fuel by five cents, resulting in a fuel price hike in October.
“Tax and duty on fuel are other revenue streams that fund government programmes and operations hence statutory payments constitute a major component on the fuel cost,” Magombo said.
“Consumers are urged to exercise their rights by shopping around for sites that offer lower prices. The difference in prices is largely due to competition in the market and consumers must benefit from such market forces.”
She, however said, ZERA has not encountered any illegal pricing in the local fuel market.
“It is important to note that if players fail to observe the existing pricing regulations, the government, through ZERA can evoke section 54 of the Petroleum Act on petroleum product prices to ensure market discipline. To date, this has not been necessary,” said Magombo.- The Source