Most fuel stations in Harare today slashed prices of both petrol and diesel by between 11 percent and 12 percent ahead of the government deadline tomorrow, with most operators saying the new prices were still competitive.
Government last week gave local oil industry up to January 14 to reduce fuel prices by almost 20 percent to $1.20 for diesel and $1.32 for petrol in line with the falling international crude oil prices.
The price of crude oil has been on a freefall since June last year were it was around $118 per barrel to $70 in December.
The freight on board (FOB) prices at Beira port stood at 0.57 and 0.52 per litre as at end of December.
Local fuel traders had not adjusted their prices to reflect this trend and maintained an average $1.50 for petrol and $1.46 for diesel.
However, a survey today established that most service stations in the capital had for the past two days partially complied with the government directive although some were implementing it gradually.
At Zuva service station along Samora Machel, diesel was selling for $1.29 per litre while the price of petrol had gone down to $1.41 from $1.50.
“We reduced the prices this morning and tomorrow the prices will be further reduced to $1.36 for petrol and $1.20 for diesel,” said an official who declined to be named.
“Even if we reduce prices, we are still making a profit,” he added.
At Redan service stations, the price of petrol prices was reduced on Monday to $1.45 per litre from $1,50 while diesel was fetching $1.35 from $1.40.
Extreme along Nelson Mandela Street said they reduced their prices two days ago to $1.32 and $1.20 respectively.
Total service stations were, however, still selling blend for $1.49 and diesel for $1.32.
“We will reduce prices when our fuel trucks arrive,” said an official, adding that it was a management decision.
Several service stations had no fuel.
One of the players in the sector who declined to be named said that it was difficult to implement the government’s directive as some players were still holding old stock which they could not sell at the new price.
“Compliance will be based on stocks, no one wants to make a loss,” he said, adding that some had failed to move their stocks between November and December last year due to the shortage of ethanol for blending purposes.
“Some are still sitting on old stocks and selling them at the current price is not feasible. However, no entity will defy government’s directive but it’s an issue of timing.”
Zimbabwe Energy Regulatory Authority officials were not available to comment.- The Source