News / National
Mnangagwa's govt cracks whip on fuel sector
29 May 2019 at 03:45hrs | Views
GOVERNMENT has started cracking down on illegal dealings in the fuel sector which include unilateral price increases and demands for foreign currency as the only form of payment.
Energy and Power Development Minister Advocate Fortune Chasi yesterday said such practices were "unacceptable" and if they persist, Government would be forced to take "serious remedial measures" to protect consumers.
Advocate Chasi said this while responding to questions from journalists during a post-Cabinet Press briefing in Harare yesterday.
"We are getting reports from across the country regards malpractices by players in the fuel industry," said Advocate Chasi.
"Various service stations have decided that they will demand US dollars from members of the public. They are refusing to accept other methods of payment.
"That is unacceptable. It's causing extreme inconvenience (to citizens). We think that it is simply selfish people who are deciding that they want to take this manner of dealing in fuel. If the practice continues, we will have to take serious remedial measures because we cannot accept the level of inconvenience that the public is being exposed to."
Advocate Chasi's remarks came at a time the social media was awash with messages saying some service stations had increased the price of petrol to $7,98, plunging motorists and commuters into panic.
However, most service stations in central Harare continued to sell petrol at the gazetted $4,97 with diesel at $4,86. Advocate Chasi ordered players in the fuel sector, whom he met yesterday afternoon, to "comply with (their) licence conditions" or risk serious consequences.
Minister of Information, Publicity and Broadcasting Services Monica Mutsvangwa said Cabinet had received the weekly report from Advocate Chasi on the country's fuel supply situation.
"The Minister (Advocate Chasi) indicated that the country's fuel supply situation is beginning to stabilise. He also stated that it had come to his notice that some fuel service stations were now selling fuel in US dollars at prices as high as US$7 per litre.
"He met them soon after Cabinet and warned them to desist forthwith from this illegal and unacceptable practice," said Minister Mutsvangwa. She said Zimbabwe Energy Regulatory Authority (Zera) personnel shall be "out in full force, carrying out spot checks at all service stations".
"Those found on the wrong side of the law will bear the consequences." Minister Mutsvangwa also said Cabinet expressed "great concern over the prevailing wanton and unjustified price increases which are inflicting severe hardships on consumers".
"Of great concern to Cabinet is the fact that the price increases are apparently being fuelled by the parallel market rate which, in turn, is driven by the Old Mutual Implied Rate.
"This is obviously a defective premise on which to predicate prices since the implied rate is driven by factors exclusively applicable to shares, which do not, therefore, apply to the pricing of ordinary goods and services," she said. However, Minister Mutsvangwa said Government is working round the clock to address the issue of price hikes in order to alleviate the suffering of citizens.
Some efforts being taken include the ongoing fine-tuning of the interbank market operations, mobilising and injection of foreign currency to stabilise the interbank market rate and addressing the issue of the fungibility of Old Mutual shares.
Further, Minister Mutsvangwa said Government was capacitating Silo Foods (Pvt) Ltd to help stabilise prices of basic commodities; and is also expecting the finalisation of work on the social contract that would enable Government, business and labour to adopt a common position on incomes and prices. The passing by Parliament of the Tripartite Negotiating Forum Bill is expected to expedite work on the social contract.
But Minister Mutsvangwa said Cabinet remains seized with the issue of prices and "calls on all business players to adhere to prudent and ethical business practices that help to create a competitive economic environment which is mutually beneficial to both consumers and businesses alike".
Turning to the parallel market rate of forex, Minister Mutsvangwa said Government is closing in on the "big sharks" that are running the illegal market.
"I think it would be folly for anyone to think that the young people on the streets without shoes are the ones driving the parallel market rate.
"I would think (that) what we need is for us to interrogate who exactly determines the exchange rate in this country. It's certainly not the RBZ Governor (Dr John Mangudya), it's certainly not the Minister of Finance (Professor Mthuli Ncube).
"Some (forex dealers) are known and Government is seized with it and there are investigations going on. There is certainly some big sharks who are throwing money; the young people when you got to see them in the streets, they don't even have shoes some of them and to think that by arresting those ones then you would have dealt with the problem (is not correct)," said Minister Mutsvangwa.
She said it was critical to find out "who is pushing the rate", in some cases by 100 percent in a week, with the net effect of pushing up prices.
Minister Mutsvangwa added that it was also important to look at issues of "our stock market".
"It's a talk in Johannesburg. Already there is a lot of talk even in the boardroom of Old Mutual in the Johannesburg Stock Exchange and as such it is critical that as Government, we interrogate what exactly is happening," she said, adding that no responsible government will leave its people in the hands of multi-national companies.
Energy and Power Development Minister Advocate Fortune Chasi yesterday said such practices were "unacceptable" and if they persist, Government would be forced to take "serious remedial measures" to protect consumers.
Advocate Chasi said this while responding to questions from journalists during a post-Cabinet Press briefing in Harare yesterday.
"We are getting reports from across the country regards malpractices by players in the fuel industry," said Advocate Chasi.
"Various service stations have decided that they will demand US dollars from members of the public. They are refusing to accept other methods of payment.
"That is unacceptable. It's causing extreme inconvenience (to citizens). We think that it is simply selfish people who are deciding that they want to take this manner of dealing in fuel. If the practice continues, we will have to take serious remedial measures because we cannot accept the level of inconvenience that the public is being exposed to."
Advocate Chasi's remarks came at a time the social media was awash with messages saying some service stations had increased the price of petrol to $7,98, plunging motorists and commuters into panic.
However, most service stations in central Harare continued to sell petrol at the gazetted $4,97 with diesel at $4,86. Advocate Chasi ordered players in the fuel sector, whom he met yesterday afternoon, to "comply with (their) licence conditions" or risk serious consequences.
Minister of Information, Publicity and Broadcasting Services Monica Mutsvangwa said Cabinet had received the weekly report from Advocate Chasi on the country's fuel supply situation.
"The Minister (Advocate Chasi) indicated that the country's fuel supply situation is beginning to stabilise. He also stated that it had come to his notice that some fuel service stations were now selling fuel in US dollars at prices as high as US$7 per litre.
"He met them soon after Cabinet and warned them to desist forthwith from this illegal and unacceptable practice," said Minister Mutsvangwa. She said Zimbabwe Energy Regulatory Authority (Zera) personnel shall be "out in full force, carrying out spot checks at all service stations".
"Those found on the wrong side of the law will bear the consequences." Minister Mutsvangwa also said Cabinet expressed "great concern over the prevailing wanton and unjustified price increases which are inflicting severe hardships on consumers".
"Of great concern to Cabinet is the fact that the price increases are apparently being fuelled by the parallel market rate which, in turn, is driven by the Old Mutual Implied Rate.
"This is obviously a defective premise on which to predicate prices since the implied rate is driven by factors exclusively applicable to shares, which do not, therefore, apply to the pricing of ordinary goods and services," she said. However, Minister Mutsvangwa said Government is working round the clock to address the issue of price hikes in order to alleviate the suffering of citizens.
Some efforts being taken include the ongoing fine-tuning of the interbank market operations, mobilising and injection of foreign currency to stabilise the interbank market rate and addressing the issue of the fungibility of Old Mutual shares.
Further, Minister Mutsvangwa said Government was capacitating Silo Foods (Pvt) Ltd to help stabilise prices of basic commodities; and is also expecting the finalisation of work on the social contract that would enable Government, business and labour to adopt a common position on incomes and prices. The passing by Parliament of the Tripartite Negotiating Forum Bill is expected to expedite work on the social contract.
But Minister Mutsvangwa said Cabinet remains seized with the issue of prices and "calls on all business players to adhere to prudent and ethical business practices that help to create a competitive economic environment which is mutually beneficial to both consumers and businesses alike".
Turning to the parallel market rate of forex, Minister Mutsvangwa said Government is closing in on the "big sharks" that are running the illegal market.
"I think it would be folly for anyone to think that the young people on the streets without shoes are the ones driving the parallel market rate.
"I would think (that) what we need is for us to interrogate who exactly determines the exchange rate in this country. It's certainly not the RBZ Governor (Dr John Mangudya), it's certainly not the Minister of Finance (Professor Mthuli Ncube).
"Some (forex dealers) are known and Government is seized with it and there are investigations going on. There is certainly some big sharks who are throwing money; the young people when you got to see them in the streets, they don't even have shoes some of them and to think that by arresting those ones then you would have dealt with the problem (is not correct)," said Minister Mutsvangwa.
She said it was critical to find out "who is pushing the rate", in some cases by 100 percent in a week, with the net effect of pushing up prices.
Minister Mutsvangwa added that it was also important to look at issues of "our stock market".
"It's a talk in Johannesburg. Already there is a lot of talk even in the boardroom of Old Mutual in the Johannesburg Stock Exchange and as such it is critical that as Government, we interrogate what exactly is happening," she said, adding that no responsible government will leave its people in the hands of multi-national companies.
Source - the herald
