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Zimbabwe fuel pricing system gives unfair advantage to people in Harare
27 Aug 2019 at 21:26hrs | Views
The zonal fuel pricing system introduced by the Zimbabwe Energy Regulatory Authority (ZERA) which will see fuel prices being determined by location has sparked outrage.
According to the prices set by ZERA, Victoria Falls, Hwange, Beitbridge and Plumtree, would now sell the most expensive fuel.
For instance, a litre of diesel at Victoria Falls is now ZW$10.86 while a litre of blend costs ZW$10.56, which is 40 cents more than fuel sold in Harare.
In Bulawayo, a litre of petrol will cost ZW$10.39 while a litre of diesel will cost ZW$10.69.
Analysts who spoke to CITE said the pricing model is unfair and called on the government to provide a cushion for the affected areas.
Economic analyst, Dr Felix Chari, said ZERA controlled prices of fuel on the realisation that it is a basic commodity and is crucial in the sustainability of the economy but described the zonal pricing model as biased.
"It is unfair to protect a portion of the population ahead of others. This perpetuates the marginalisation of some regions of the country as regions such as Bulawayo, Plumtree, Beitbridge and Hwange are known to be lagging behind in economic activities and it requires the intervention of government to bring them at par with other regions of the country," he said.
Dr Chari noted the difference in distribution from the central distribution centre in Harare could be a reason why ZERA pegged the regional prices.
"We, however, recommend that government cushion consumers by subsidising on the additional distribution costs," he said.
Commenting on his twitter, social analyst, Dr Alex Magaisa concurred that even if transport costs are used to justify the new prices, the government should consider reducing fuel taxes for the affected regions and level the playing field.
"In coming up with prices, authorities had to be practical in considering the social circumstances, especially where some places had a history of marginalisation and inequitable development. I really cannot believe the regulator and policy-makers sat down and came up with this zonal pricing system which hits all the wrong notes and though it was the best they could do? With all our ugly history to consider? Economic decisions are not made in a vacuum," he said.
Dr Magaisa added it was common knowledge that there have long been legitimate concerns over underdevelopment in and discrimination of the southern and western regions of the country compared to the capital and its surrounding regions.
"This is a thoroughly insensitive pricing system. But is it accidental?" he posed.
Magaisa noted that government ought to level the playing ground since much of the cost of fuel is government taxes.
"They will use justifications like transport costs, with Mutare being the lowest and Victoria Falls the highest. But Harare fuel is cheaper than Rusape's. This is imposing price differences according to regions in this manner is highly insensitive and a recipe for attrition between peoples and regions," he said.
According to the prices set by ZERA, Victoria Falls, Hwange, Beitbridge and Plumtree, would now sell the most expensive fuel.
For instance, a litre of diesel at Victoria Falls is now ZW$10.86 while a litre of blend costs ZW$10.56, which is 40 cents more than fuel sold in Harare.
In Bulawayo, a litre of petrol will cost ZW$10.39 while a litre of diesel will cost ZW$10.69.
Analysts who spoke to CITE said the pricing model is unfair and called on the government to provide a cushion for the affected areas.
Economic analyst, Dr Felix Chari, said ZERA controlled prices of fuel on the realisation that it is a basic commodity and is crucial in the sustainability of the economy but described the zonal pricing model as biased.
"It is unfair to protect a portion of the population ahead of others. This perpetuates the marginalisation of some regions of the country as regions such as Bulawayo, Plumtree, Beitbridge and Hwange are known to be lagging behind in economic activities and it requires the intervention of government to bring them at par with other regions of the country," he said.
Dr Chari noted the difference in distribution from the central distribution centre in Harare could be a reason why ZERA pegged the regional prices.
"We, however, recommend that government cushion consumers by subsidising on the additional distribution costs," he said.
Commenting on his twitter, social analyst, Dr Alex Magaisa concurred that even if transport costs are used to justify the new prices, the government should consider reducing fuel taxes for the affected regions and level the playing field.
"In coming up with prices, authorities had to be practical in considering the social circumstances, especially where some places had a history of marginalisation and inequitable development. I really cannot believe the regulator and policy-makers sat down and came up with this zonal pricing system which hits all the wrong notes and though it was the best they could do? With all our ugly history to consider? Economic decisions are not made in a vacuum," he said.
Dr Magaisa added it was common knowledge that there have long been legitimate concerns over underdevelopment in and discrimination of the southern and western regions of the country compared to the capital and its surrounding regions.
"This is a thoroughly insensitive pricing system. But is it accidental?" he posed.
Magaisa noted that government ought to level the playing ground since much of the cost of fuel is government taxes.
"They will use justifications like transport costs, with Mutare being the lowest and Victoria Falls the highest. But Harare fuel is cheaper than Rusape's. This is imposing price differences according to regions in this manner is highly insensitive and a recipe for attrition between peoples and regions," he said.
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