Fuel price goes up

PRICES of petrol and diesel have increased from about US$1,19 and USc94 per litre respectively to US$1,27 and US$1,09 due to an upward review of crude oil price on international markets over the past month. Zimbabwe Energy Regulatory Authority acting chief executive, Engineer Misheck Siyakatshana told our Harare Bureau that local prices are following what is happening at the international level.

"In January 2016, the brent crude oil was at an average price of US$29 per barrel, which is equivalent to 159 litres, and it increased to about US$35 per barrel in February. The price further increased to US$42 per barrel in April. The local fuel prices are just following these price increases that have been happening at an international level. If fuel prices are increasing (like what they are doing at this juncture), there is nothing that can be done to stop fuel increases in Zimbabwe. The local fuel prices have to go up in tandem with changes on the international scene."

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Fuel prices in Zimbabwe are still higher than regional averages. ln Zambia, petrol and diesel sell for an average price of USc89 and USc77 respectively. ln Mozambique, petrol is pegged at US$1,04 and diesel at USc81. In Malawi, diesel is selling for about US$1,13 while petrol is going for US$1,16. Botswana petrol is going for USc75 while diesel is being sold for USc71 per litre.

Eng Siyakatshana explained that the price variations are affected by factors such as government policies on fuel taxes, fuel supply chain structure (whether there is a refinery or not), fuel stabilisation mechanisms, transportation (whether the country is landlocked or not); subsidies and exchange rates against the United States dollar.

Those operating in the sector have argued that Zimbabwe lags behind in benefiting from the international fall of fuel prices due to the prolonged period required to transport fuel from source to retail.