Energy and Power Development Minister Samuel Undenge today said government has put in place a two-week rule for fuel retailers to adjust their prices depending on global developments, while dismissing the existence of a cartel accused of price fixing.
Fuel retailers in Zimbabwe have been accused of profiteering after they failed to reduce prices in line with public expectations at a time when global fuel prices were at an all-time low in the last six months.
Undenge said to stop the players from taking advantage of the fluctuations in the future, government had given the industry a deadline of two weeks to adjust prices up or down depending on global price movements.
“I have directed that price reviews be done every two weeks because our estimation is that this is long enough for old stocks to have been sold,” Undenge told Parliament during a question and answer session.
“When prices go up or down (on the global market), they have to wait two weeks before making any changes.”
The energy minister dismissed assertions that there was a cartel of players in the industry who set the price of fuel in the country.
“The price is dependent on the pricing model that we use, it’s not dependent on any cartel,” he said.
Undenge said prices were set according to an input model that was agreed upon between the Zimbabwe Energy Regulatory Authority (Zera) and players in the fuel industry.
The energy regulator, he said, also monitored pump prices charged by retailers to ensure that they were kept within agreed margins and had power to punish those found charging more.
Undenge said there were a variety of factors that affected fuel prices, noting that the commodity was general expensive in land locked countries like Zimbabwe.
He maintained that prices being charged on the market were within agreed thresholds, adding that the decision by government to increase duty on fuel imports last month had hit on sector’s ability to further reduce prices.
The price for both petrol and diesel in the country has declined by between 20 and 35 cents in the wake of the global price decline.
Undenge also dismissed allegations that the fuel that is being sold in Zimbabwe was of lower quality compared to that sold in neighbouring countries.
He said Zera constantly monitored the quality and ensured it was within acceptable standards.- The Source