Outrage over Zimbabwe fuel prices

There is outrage over Zimbabwe's refusal to slash fuel prices after a 50 percent price markdown in global oil prices.

The price of Brent crude oil fell below $50 a barrel for the first time on Wednesday since May 2009, from $110 in June last year, resulting in most regional countries pegging their petrol and diesel prices around $1,20 a litre.

In Zimbabwe, fuel has continued retailing at an average of $1,45  a litre for diesel and $1,50 for petrol.

While Samuel Undenge, the Energy minister, was unreachable for comment, Zimbabwe Energy Regulatory Authority chief executive Gloria Magombo recently told this publication that her organisation expected to see a reduction in fuel prices in the coming few months.

Magombo said the delayed effect was due to longer transportation routes of fuel into local retail market, which took around two months for ships to dock at Beira port from the oil rigs.

Rosemary Siyachitema, the Consumer Council of Zimbabwe (CCZ) executive director, said responsible authorities must act on the issue immediately to ensure consumers benefit from the decline in international oil prices.

"It seems it is very easy for fuel dealers to effect a price hike when global oil prices rise but are very reluctant to reduce prices when there is a decline in oil prices," she said.

"Considering the fact that international oil prices have so far made history by declining by close to 50 percent, Zimbabweans - like any other nationals - should have seen a substantial decrease in fuel prices and not the meagre three cents' reduction."

Analysts said high oil prices over the last decade helped countries such as the United States and Canada to expand local production.

The consumer watchdog said fuel was one of the major cost-push factors in Zimbabwe and the government must ensure that there was a corresponding benefit to locals when there was an international price reduction on commodities.

"Why it is that the consumer is the only one who has to tighten his belt all the time?" Siyachitema queried, calling for an investigation on the conspiracy that was taking place in the fuel sector.

Tourism minister Walter Mzembi also weighed in on the matter and said high fuel prices were hindering the development of tourism in the country.

"There is serious cartelling and collusion taking place in the sector and this must be investigated," Mzembi said.

Mzembi noted that high fuel prices caused Dutch airline KLM to withdraw from the Zimbabwean route.

Commentator Francisco Sileya said a serious reduction in fuel prices had been due for some time.

"How can oil prices be at a third of their highs and still we are paying a very high price in Zimbabwe?" he asked.

"This is another example of how poor leadership is failing to manage the economy for the benefit of Zimbabweans."

Sileya noted that high fuel prices were driving up food and transport costs in Zimbabwe.

"They are also making it harder for local businesses to grow, flourish and create much needed jobs," he said.

"It also raises the question of how we can hope to export Zimbabwean crops and products across the region when the cost of transporting them is so high."