Govt must punish errant fuel dealers

HARARE - Fuel dealers must fully cooperate with the recent government directive and must effect a price slash in line with international trends.

Oil prices on the international market have been falling significantly from around $118 a barrel in June last year to about $46 a barrel this week, yet Zimbabweans have not benefited from this decline in prices.

After waiting for more than six months, the government was recently forced to issue a directive ordering fuel dealers to reduce fuel prices by $0,20 from $1,50 per litre for petrol and $1,40 per litre for diesel by January 14, 2015.

Although some service stations had by early this week reduced the fuel prices, there are some who are refusing to effect the price slash.

As such, we are calling upon the government to monitor and ensure that those who are found operating outside the directive are duly punished.

For the past six months, fuel has been one of the most expensive items in the household budget at a time when other regional countries were enjoying low fuel prices.

Theoretically, the prices of most goods and services should come down with a lower fuel price as transport costs are worked into the price of goods.

This has happened in neighbouring countries such as South Africa and Mozambique.

As such, the government must regularly help people by keeping fuel costs down. It is also really important for business that fuel costs are controlled. Rising fuel costs squeeze margins for many small and medium size businesses.

At the moment, people are rightly angry because they feel that pump prices do not fall as much as they should on the back of falling oil prices — especially under the current economic circumstances.

As a nation, we are quite aware that when the price of oil rises, pump prices go up as well.

But when the price of oil falls, pump prices drift down like a feather.

This profiteering mind-set by local fuel dealers must come to an end.

Going forward, the government must allow more players into the ethanol sector so that consumers continue to benefit from low prices.

If Zimbabwe produces more ethanol and the E20 policy comes back into effect again, there is no justification why fuel prices should be on the rise.

In countries such as Brazil and the United States where ethanol is blended with petrol, pump prices are significantly lower than in other countries.

As such, government must regulate fuel prices to ensure that we are not ripped off by these unscrupulous fuel dealers. 

Comments (1)

Ceteris paribus the ethanol blending which is shrouded in controversy, with legislation crafted to create a monopoly for one persons business in interests, namely Green Fuel, the current price of $48/ barrel for Brent crude should be followed by prices being revised down to $1 per liter for petrol. Besides the increase in duty petrol should now stabilize to about $1 per liter. Global oil firm BP anticipate prices to vary between $50 and $60 for the next 2 to 3 years. Government must order oil companies to further reduce prices, not for us to hoodwinked into thinking that oil companies are doing us any favor. In the process Government must also be sincere and not raise duties to offset real price reductions.

Tawa - 18 January 2015

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