News / National
Weak Brent crude prices to have limited effect on Zimbabwe's pump prices
06 Jan 2015 at 17:03hrs | Views
Although the pump prices of petrol and diesel in Zimbabwe have declined about 1,9 percent and 4,1 percent, respectively since October last year, observers say local fuel prices will not go down any further.
This is despite the global Brent crude oil price today hitting below $50 a barrel, levels which were last experienced in April 2009.
A survey by BH24 shows that fuel prices at local service stations today was averaging $1,52 per litre for petrol and $1,38 per litre for diesel.
In October last year, Zimbabwe's pump fuel prices average of $1,55 per litre for petrol and $1,44 per litre for diesel.
African Development Bank chief regional economist (Zimbabwe Field Office) Mary Manneko Monyau says there are a number of factors that help determine the fuel pump price in Zimbabwe.
This means local fuel prices will not automatically and/or directly respond to developments on the global arena.
"Domestic fuel prices are driven by refinery costs, fixed costs (shipping costs, sea handling costs, pipeline charges, government levies and taxes) and also retail and wholesale margins," she said.
Brent crude oil prices have been volatile since the Organisation of Petroleum Exporting Countries (OPEC) heightened its policy of testing rival producers' tolerance for lower prices during the second half of last year.
And in a November 27 meeting, OPEC announced it would not cut its output anytime soon. Observers say the move was targeted at out-pricing the US domestic shale production, which could result in Brent crude oil prices remaining weak in the medium-to-long-run.
As 2014 came to a close, the Zimbabwe Energy Regulatory Authority (ZERA) said the largely unchanging local pump prices of petrol and diesel were within the provisions allowed by Statutory Instrument 80 of 2014, which provide Zimbabwe's pricing schedule.
Notwithstanding that statement, ZERA also commissioned a study on fuel prices with results expected anytime soon.
The energy regulatory body does not set the local price of fuel, but functions to monitor prices prevailing on the market to ensure that the cap is not exceeded.
This is despite the global Brent crude oil price today hitting below $50 a barrel, levels which were last experienced in April 2009.
A survey by BH24 shows that fuel prices at local service stations today was averaging $1,52 per litre for petrol and $1,38 per litre for diesel.
In October last year, Zimbabwe's pump fuel prices average of $1,55 per litre for petrol and $1,44 per litre for diesel.
African Development Bank chief regional economist (Zimbabwe Field Office) Mary Manneko Monyau says there are a number of factors that help determine the fuel pump price in Zimbabwe.
This means local fuel prices will not automatically and/or directly respond to developments on the global arena.
"Domestic fuel prices are driven by refinery costs, fixed costs (shipping costs, sea handling costs, pipeline charges, government levies and taxes) and also retail and wholesale margins," she said.
Brent crude oil prices have been volatile since the Organisation of Petroleum Exporting Countries (OPEC) heightened its policy of testing rival producers' tolerance for lower prices during the second half of last year.
And in a November 27 meeting, OPEC announced it would not cut its output anytime soon. Observers say the move was targeted at out-pricing the US domestic shale production, which could result in Brent crude oil prices remaining weak in the medium-to-long-run.
As 2014 came to a close, the Zimbabwe Energy Regulatory Authority (ZERA) said the largely unchanging local pump prices of petrol and diesel were within the provisions allowed by Statutory Instrument 80 of 2014, which provide Zimbabwe's pricing schedule.
Notwithstanding that statement, ZERA also commissioned a study on fuel prices with results expected anytime soon.
The energy regulatory body does not set the local price of fuel, but functions to monitor prices prevailing on the market to ensure that the cap is not exceeded.
Source - BH24
