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.