Basics' prices to drop 5%

THE Confederation of Zimbabwe Industries (CZI) says prices of some basic commodities are set to drop by five percent due to a reduction of excise duty on fuel.

On Wednesday, the Government ordered a fuel price cut with immediate effect after the Ministry of Finance and Economic Planning reduced excise duty on diesel, petrol and paraffin by about 18 percent.

The move is meant to stabilise the prices of basic commodities as this would lower the cost of doing business.

Excise duty on petrol has been reduced from $0.45 per litre to $0.385 per litre while duty on diesel and paraffin was revised downwards by $0.07 to $0.33 per litre.

Fuel dealers have been directed to effect a 3.6 percent reduction on the maximum retail petrol price to $1.35 per litre, 5.4 percent cut on the retail price of diesel to $1.23 per litre and a 5.6 percent cut on paraffin price to a cap of $1.17 per litre.

Before the reduction of duties, petrol was selling at an average price of $1.40 per litre while the prices of diesel and paraffin were about $1.30 and $1.24 per litre respectively.

In an interview yesterday, CZI president Mr Sifelani Jabangwe said:

"As a result of a reduction in excise duty on fuel and Government's directive to reduce fuel prices, some of the products particularly those 15 products listed under the Price Monitoring Programme will go down by between one percent and five percent."

In November, the Government announced a price monitoring programme listing 15 selected commodities with a view to arrest possible instances of profiteering and speculation by unscrupulous businesses.

Some of the listed products include edible oil, flour, salt, and mealie meal.

The Grain Millers' Association of Zimbabwe, which represents the milling industry, has put a cap on wholesale and retail prices of commodities manufactured by its members as part of efforts to support the price monitoring programme.

In the past few months, some unscrupulous businesses have increased prices of basic commodities by very wide margins driven by speculative tendency and profiteering.

For instance, some retailers in Bulawayo were selling cooking oil from a local manufacturer, United Refineries Limited (URL) at above 10 percent the maximum retail price set by the producer.

Recently, URL released the recommended maximum price schedule that retailers selling its Roil edible oil brand should charge pegging a 375 mililitre and 750ml bottles at $1 and $1.75 respectively while two litres was pegged at $3.90 and $10.60 for five litres.

A snap survey by this paper last week revealed that most major retailers had not heeded the recommended maximum retail prices by the supplier.

For example, a 375 ml of Roil cooking oil bottle was being sold at $1.25 while brands such as Sunshine and Roil were selling at $4.30 for two litres.

In response to latest developments in the energy sector, Mr Jabangwe said some of the manufacturers were in the process of reducing their prices.

Asked how soon the producers were likely to reduce prices, he said:

"Some will have to clear the stocks that they have before reducing their prices and we expect to see the impact of reduction in excise duty on fuel and prices of fuel in the next few weeks."

President Emmerson Mnangagwa has warned businesses against profiteering, urging them to be sensitive to the plight of consumers.

The Zanu-PF Politburo has since established an ad-hoc committee to deal with wanton increases of prices of basic commodities.