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Mayhem over fuel price hikes

by Staff reporter
14 Jan 2019 at 15:06hrs | Views
MOTORISTS, economists, opposition parties and the commuting public yesterday reacted angrily to President Emmerson Mnangagwa's move to hike fuel prices by 150%, which triggered a wave of price increases on almost all commodities and services, further plunging the populace into poverty.

There was chaos in most towns and cities around the country as commuters woke up to astronomically high fares following the price increases announced by Mnangagwa on Saturday night.

The increases saw the price of diesel jumping from $1,26 to $3,11 a litre, while petrol now sells at $3,31 up from $1,34 per litre.

Renowned economist John Robertson said although the fuel price increase made economic sense, it would bring about some undesired consequences such as increasing the cost of living and pushing up inflation by between 40% and 50%.

"There will be steep increases in other costs. Increasing prices of fuel was the right thing to do. We had a wrong exchange rate. Fuel was too cheap and people from other countries were refuelling in Zimbabwe," Robertson said.

"This was necessary. Unfortunately, (it) has side effects. This will trigger wage demands, inflation 40% and 50% before long. The companies are not making money already and they will close down. This will lead to serious job losses."

He said government's 1:1 exchange rate between the United States dollar and the local surrogate currency, the bond note, was unrealistic.

"They want to run the exchange rate as a privilege to other people. This is fuelling corruption," he said.

Another economist Emmanuel Mugadza said the increase was a subtle admission by Mnangagwa that the local currency had failed to match the US$, although the Zanu-PF leader cannot openly say so.

"This is a step in the right direction, but painful because the rising costs are not corresponding with income. The fuel hike will trigger price increases and ordinary Zimbabweans will suffer," he said.

Mugadza said Zimbabwe needed a long-term solution to the fuel crisis, challenging Mnangagwa to move fast in ensuring the country revamps its exports to generate more foreign currency for the economy to be stable.

Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said the hike in fuel prices was a long overdue move that would, however, be painful.

"After three years and not a price increase, with the distortions in the market, it was more necessary, but will be painful," Jabangwe said.

"Things could have become worse without the increase. Right now, we will enter into discussions or we can go into other costs, including compensation of labour."

Most motorists who spoke to NewsDay expressed dismay that the prices would push up other costs.

"I have been in the queue since Thursday and was hoping to get fuel today, only to be told the prices have increased. That is insensitive. I now need about $200 to fill up my tank when in the past I needed $80," one angry motorist who refused to be named said.

"The percentage increase is just too high. We cannot afford it."

Another motorist who only identified himself as Patrick said: "They hiked the prices and yet there is no fuel. I think they created a worse situation to justify increasing the prices, as if the new 2% tax they levied us is not enough."

Most commuters said they would not be able to report to work in the wake of new fares today.

They said it was mid-month and it was tough to adjust their budgets.

Civil servants, who are negotiating for salary increases, have threatened to down tools, claiming they were now incapacitated to go to work. They have rejected a 10% salary hike offer by government.

"We won't manage the new fares. Some will go to work on foot, or even sleep at work and go home on Fridays for the weekend. The situation is tough," Cecilia, who works as a shop attendant in the capital's central business district, said.

The Nelson Chamisa-led MDC said Mnangagwa's fuel price hike was shocking and misguided.

"That the fuel increase will only trigger a wave of price hikes on each and every other item on the shelves is as obvious as the incapacity of Zanu-PF to govern and lead a prosperous Zimbabwe," the opposition party spokesperson Jacob Mafume said.

"Instead of accepting its gross failure to turn the economy around, the cartel now basks in the pretence of 'mega deals' in curious corners of the forgotten world such as Uzbekistan, Khazakistan, and other places you may never have heard of.

"The Zimbabwean commuter will, starting Sunday (yesterday), fill the pinch of this administration's hopelessness, while Mnangagwa and his scarfed henchmen will be comfortably flying Swiss jets."

Mnangagwa was expected to leave last night on an official visit to five Asian and European countries.

Obert Gutu, deputy president of the Thokozani Khupe-led MDC-T, said the increase in the prices of fuel would have a ripple effect across all facets of the economy.

"People will have to fork out more money for transport as it is inevitable that kombi and bus fares will rise at least threefold," Gutu said.

"Wages and salaries for the few people who are still lucky enough to be in formal employment are still very low compared to the skyrocketing prices of basic goods and services such that there is a complete and total disconnect between people's earnings and their expenditure."

Added Gutu: "The hike in the price of fuel will trigger a highly inflationary impact on the prices of basic foodstuffs such as bread, mealie-meal and cooking oil since producers and traders will be paying more for their fuel requirements.

"The national economy is in a total mess and now is the time for all concerned Zimbabwean patriots to put our heads together and chart a united way forward as we seek to navigate the treacherous socio-economic terrain. It cannot continue to be business as usual going forward."

In Karoi yesterday, farmers who battled for too long to secure fuel suffered double trouble following fuel price hikes.

"Service stations say they do not have fuel besides the hike announced by President. This is unbelievable for us as rains are now upon us, but fuel remains a big challenge," a farmer, Dennis Maramba, said.

"As it stands, the cash crisis hampered our operations and this hike will affect our projections as we are getting out of budget due to government's lack of better planning."

In Gweru, there was chaos at the long-distance bus terminus, Kudzanayi yesterday morning after travellers en-route to Mutare from Kwekwe were introduced to new fares before arriving at their destination.

The travellers, who were boarding a local bus, had initially been charged $20 on departure from Mbizo shopping centre in Kwekwe at around 4am.

However, upon arrival in Gweru, the bus operator raised the fare to $45 after receiving information of the fuel price hikes.

Hordes of commuters in the Midlands capital yesterday walked to the city as they woke up to increased fares as a result of a hike in fuel prices.

The Zimbabwe Congress of Trade Unions, the MDC as well as teachers have threatened mass protests today over the hikes and the deteriorating economic situation in the country.

Civic group Tajamuka/Sesijikile's spokesperson Promise Mkwananzi said they would mobilise motorists on fuel queues for a mass action against Mnangagwa's administration.

"We will deploy in all places, fuel and bank queues, to mobilise people for action against Mnangagwa. We will roll out the programme tomorrow (today), he said.

Source - newsday
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