Zera threatens 'rogue' fuel traders

HARARE - The Zimbabwe Energy Regulatory Authority (Zera) has threatened to revoke licences of fuel dealers who hike prices without government’s approval.

This comes amid reports that traders have hiked prices of the commodity — both petrol and diesel — by as much as $0, 20.

“Any fuel licensees who charge beyond the price allowable in terms of statutory instrument 83 of 2009: Control of Goods (Petroleum Prices) will have their licences cancelled in terms of the Petroleum Act,” said Zera chief executive Gloria Magombo.

“The international crude oil prices have generally remained stable and therefore Zera does not expect any upward movement in the prices of fuel. Fuel prices have not changed in Zimbabwe and remain in line with statutory instrument 83 of 2009,” said Magombo.

According to the Authority’s cost-build-up analysis of fuel importers, wholesalers and retailers — “the prevailing pump prices are in line with the said regulations.”

A snap survey by businessdaily showed that prices of petrol ranged from $1,48 to $1,51 per litre while diesel was between $1,33 and $1,35 per litre.

Magombo pointed that the major cost drivers of fuel was mainly the landed price and the distribution expenses.

“Fuel prices can only be affected with what affects international oil prices. When global prices come down, the local prices will also come down. Our prices are different from those obtaining in the South African market because of the variable of the weakening South African rand to the United States dollar.

That’s why our prices are more stable,” said Magombo.

Economist Kipson Gundani said while Zimbabwe, as a non-oil producing country, feels the knock-on effect of price increases on the international market, “another issue is about demand and supply.”

“If fuel inflows in the country are decreasing it can spark a general fuel price hike across the board. This means that a small increase in fuel prices will adversely impact on general prices because it is a universal component in the functionality of any economy,” said Gundani.

Comments (2)

This whole business of threatening to withdraw licenses is stupid and ridiculous. That is why the country is going down the tubes. If costs have gone up, business should just adjust the price accordingly. The risk premium for doing business in Zim has just gone up so whats the fuss about?

Chipikiri - 8 August 2013

MADAM MAGOMBO, l think you are forgetting that you are importing the commodity that became available due to the GPA ,but now that thing has ended,With the political retoric from ZANU l am seeing a situation were by fuel is going to be in short supply because text book economics doesn't exist in ZANU PF that situation of 2008 is on its way ,price increases on a daily basis

CASHTALK - 9 August 2013

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