'Zanu PF ignoring inflated fuel prices'

HARARE - Morgan Tsvangirai’s MDC has accused Energy minister Samuel Undenge of allowing big fuel retailers to maintain large profit margins while the price of oil was falling sharply.

A year ago, the price of crude oil was over $115 a barrel.

A few days ago, the price fell to below $28 a barrel.

This is a decline of $87 a barrel or 75 percent.

In Zimbabwe, fuel prices at the pump a year ago were at an average of about $1,40 a litre or R16 per litre in South Africa.

Currently, average fuel prices in Zimbabwe are about $1,20 a litre, a decline of just 14 percent while in South Africa prices are hovering about R10 per litre — a market decline of nearly 40 percent despite a 30 percent devaluation in the rand.

The fall in prices in the South African market has been more or less in line with global trends, but that is not the case in Zimbabwe.

The MDC expressed disappointment at the Zanu PF-led government’s slowness to adjust prices at the pump when the cost of crude oil was plummeting.

The MDC said consumers looking around them will have noted the many millions of dollars being spent on refurbishing old filing stations, new pumps, new signage, forecourts, gardens and more — all signs that the stark decline in the domestic economy has not affected retail distributors of fuel products.

“It is time the minister of Energy gave a clear and honest explanation as to why prices in Zimbabwe remain so high and what he is doing about the issue,” the MDC statement said.

Undenge was not taking calls from the Daily News. But the last time the Zimbabwe Energy Regulatory Authority slashed prices was in September last year.

Said the MDC statement: “Consumers need to be reminded that a cent a litre at the pump in Zimbabwe is equal to $16 million dollars a year — a 60 percent reduction in the pump price would put $840 million dollars back into their pockets.

“That a small handful of companies should be allowed to milk the local market and consumers of this sort of money is a disgrace. But then we have come to expect this sort of behaviour from Zanu PF.”

The MDC said during the Government of National Unity, the ministry of Energy came under the control and management of the opposition party and “during the four years that the party was in charge, not only was the petroleum industry completely reorganised but the ministry insisted on competition between bulk suppliers and the wholesale and retail industry in Zimbabwe.”

“The result was that liquid fuels were brought into free supply at market prices and the benefits to the consumers were immediate,” the statement said.

“Competition ensured that suppliers were forced to limit their margins on sales and to compete with each other in an open, well regulated market.

“Since the Zanu PF regime resumed control of the ministry of Energy in 2013, the ministry has been characterised by incompetence, mismanagement and corruption.”

The MDC said the lag in dropping prices at the pump did not indicate an entirely vibrant competitive market.

In addition to unscrupulous traders, the MDC said, many with dubious reputations have taken control of the industry and margins, while profitability has increased dramatically at the expense of the consumer.

Comments (10)

Yah it's high time these prices were reduced.This can curb the inflationary prices that the consumer is being faced with.We always wonder why some countries fuel is trading at less than a Dollar.Someone is promoting black market here

Linonifulu - 28 January 2016

Lusaka is 495km further up north of harare. We both get fuel from the same source, Beira. Zim has an extra advantage of the Feruka pipeline and yet in Lusaka it costs $0.79c 40cents less than in Zim. Zimbabwe Leaders are just too corrupt Bawethu.

Valembe - 28 January 2016

Do you know that people are cross the boarder with fuel for resale. This is a dangerous trade, but its caused by this lag our government has on regulating fuel prices locally. Fuel Price Must Fall!

Fuel Prices Must Fall - 28 January 2016

Well, a reduction depends on how much fuel we were holding. So maybe we are still fueling on stock that was procured at a higher price. I am laughing at this as I type because that is the only reason Gvt would have but where the hell would we have stocked up that much.

UnBanked - 28 January 2016

The Minister of Energy needs to issue a statement outlining the cost structure of fuel pricing in Zimbabwe. Apart from crude oil having dropped from $60 per barrel last year to $30 this year, fuel in Zimbabwe is blended with ethanol so it should be cheaper than in the SADC region. Fuel prices have ripple effects in all sectors of the Zimbabwe economy and is a major cost driver in the cost of production of all goods including export products and therefore affects export competitiveness. The same Minister of Energy has recently been pushing for a 49% electricity tariff hike but does not see the need to reduce fuel prices in Zimbabwe in line with trends in the World market and the SADC region. The Minister of Energy is quiet about fuel prices becoz govt is making huge tax revenue to finance govt expenditures at the expense of fuel users and the economy at large. Fuel duties are the biggest component of revenue flows to Treasury. To get fuel reduced in Zimbabwe somebody must launch a #Fuel Price must Fall in Zimbabwe # publicity.

Pondo - 29 January 2016

Its very clear that the difference between the regional average and our prices locally is a result of government taxes. Let it be known that government will never run out of cash but instead continue taxing its hardworking people [to whom they are not giving any job]......those are the signs of a failed government

hwindi - 29 January 2016

Minister Undenge vane ma problems e maintenance. Nguva yekutarisa zve fuel izvi Havana.

Wonaika - 29 January 2016

Minister Undenge vane ma problems e maintenance. Nguva yekutarisa zve fuel izvi Havana.

Wonaika - 29 January 2016

Nhai Pondo you are saying somebody must launch a #Fuel Price Must Fall In Zimbabwe# publicity. That's our problem in Zimbabwe. We always want somebody to do it for us. Lets all start the publicity campaign.

Chamatinhari - 29 January 2016

In Zambia petrol is at USD 0.60 per litre and is landlocked like Zimbabwe. Surely some people in high positions are the fuel dealers and are resisting to reduce prices. Thses people are the sources of our problems not sanctions.

nzou samanyanga - 3 February 2016

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