ZERA should revise its pricing and regulatory structure

It really boggles the mind how the MDC-T constantly finger points at the ruling Zanu PF government in a bid to tarnish its good image with wild accusations.  Tsvangirai's MDC has been recently accusing the ruling party, ZANU-PF saying it was overlooking the issue of fuel prices. It is known that the price of crude oil has gone down worldwide and there is really need to look at the pricing of fuel locally, as most retailers are not aligning their prices with the market slump.

Firstly, MDC-T should be cognizant that there is body which is responsible for the pricing and regulating of fuel prices in Zimbabwe. It is the mandate of Zimbabwe Energy Regulatory Authority (ZERA) to research on pricing of crude oil internationally and the global trends on fuel prices. If the prices of fuel are to be regulated locally, ZERA should be there to ensure this is adhered to.

Fuel is one of the most critical economic enabler which can either destabilize or stabilize an economy. In that manner, fuel prices have ripple effects in all sectors of the country's economy. ZERA should ensure that fuel prices are aligning well with the regional prices as the cost of petroleum per barrel is the same on a global market. The decline in the price of a barrel of oil should act as clear-cut market force that ought to stir downward local pump prices.

Reduction of fuel prices can go a long way in laying the foundation for the revival our economic fortunes. It is a well-known fact that Zimbabwe is grappling to resuscitate and turnaround the fortunes of its economy, hence such a critical economic enabler should be thoroughly monitored to enable a well functioning economy.

On the other hand, fuel is a major cost driver in the cost of production of all goods including export products. High fuel costs extensively affect export competitiveness. Therefore, ZERA should make sure that fuel prices are slashed in order to allow smooth flow of products being exported.

If prices of crude oil are plummeting, ZERA should make extra efforts in trying to control pump prices. A reduction of fuel prices will have a direct effect on public transport fares. Most commuter omnibuses are charging $1USD to and from town especially during peak time. Such exorbitant price has been criticized by many people who commute to work on a daily basis. Public transport operators have been distancing themselves from the high fares, pointing their fingers to local fuel retailers.

Reports have it that there is a sharp decline of crude oil prices in the last 18 months. So, one will wonder why the pump prices are also not decreasing, considering the fact that United States of America and Iran are currently producing more oil than there used to. There is certainly no fuel happiness for motorists in the country. Explaining to a local weekly press ZERA noted that the prices of fuel will decline with a small margin beginning this month.

But the point is, crude oil prices have been going down for some time, why then does it take ages for Zimbabwe to reduce fuel pump price. To add on, it is disheartening that fuel prices will be declining on a weekly basis. Engineer Gloria Magombo should be encouraged to resolve this fuel issue and put it to rest. In fact, local fuel prices should be made to align with regional prices.

ZERA should go back to the drawing board and revise its pricing and regulatory structure. Like in most countries, reduction in fuel prices should be noted and felt. As it stands, a decrease of 3 or 4 cents as proposed by ZERA is a small a drop in the ocean which most people believe must further go down.

Hence, it should be widely acknowledged that one of the most important steps that emerging economies, like Zimbabwe, can take to build a more robust economy is to put an explicit price on all products with fuel included. It's high time the USD is given its real value. Most goods in Zimbabwe are being overpriced. The Consumer Council of Zimbabwe (CCZ) should protect the interests of consumers by closely monitoring the price of goods in shops.