Govt sticks to deadline to phase out Diesel 500

ZIMBABWE will stick to the deadline to phase out the high sulphur diesel 500 by the end of the month and cut the price of the cleaner diesel 50 by about nine percent, Energy and Power Development Minister Simon Khaya Moyo has said.

In 2007, Zimbabwe moved from Diesel 5000 to Diesel 500.

Along with Mozambique, Malawi, and Zambia who also use the Beira port for fuel receipts, Harare agreed a June 2017 target to switch from Diesel 500 to Diesel 50 but agreed to give fuel dealers a grace period to clear old stocks,.

The countries intend to move to an even lower sulphur fuel Diesel 10 by 2020.

According to The Source, Minister Moyo while responding to a question by Gokwe legislator Dorothy Mangami in Parliament last week on how the Government intends to curb arbitrary fuel price hikes said:

"The country is phasing out Diesel 500 in February and Diesel 50 will be brought in and transported through (Beira) pipelines."

Minister Moyo has said his ministry will amend the Petroleum Act to criminalise the importation of Diesel 500, which he said will have to be phased out by May this year.

Last month, the Government reduced excise duty on fuel, a development that saw duty on petrol being 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.

As a result fuel dealers were directed to effect a 3.6 percent reduction in the retail price of petrol 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 $1.17 per litre.

As a result of the cut on fuel price, the price of basic commodities dropped by 4.83 percent last  month, according to the Consumer Council of Zimbabwe.

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.

Despite the reduction in excise duty on fuel, stakeholders have said Zimbabwe fuel cost build up remains very high when compared to other countries in the region due to several taxes and levies.

The country's fuel cost build up shows that the Government taxes and levies add 58.2 cents and 44.2 cents to the petrol and diesel pump price respectively.

The taxes include excise duty, Zimbabwe National Road Administration road levy at six cents per litre for both petrol and diesel, carbon tax at 13 cents per litre for diesel and four cents per litre for petrol and debt redemption levy at 0.013 cents and 0.07 cents per litre for diesel and petrol respectively introduced to clear a $170 million National Oil Company of Zimbabwe debt.

There is also the strategic reserve levy which stands 0.015 cents per litre.