ED hikes fuel prices

HARARE - In a panicky move which analysts described as an act of desperation — and which economic experts said would not resolve the country’s debilitating fuel shortages — President Emmerson Mnangagwa’s government sharply and immediately increased the prices of fuel last night.

As a result, and with effect from midnight last night, the price of petrol now costs a whopping $3,31 a litre — while diesel is now pegged at an equally stiff $3,11 per litre.

These new prices, the government said, were based on the official, but fallacious exchange rate of one to one between the country’s surrogate currency, the bond note, and the United States dollar.

And in a clear admission that authorities now admit this official exchange rate is bogus, they said foreign embassies and tourists would buy their fuel needs at designated points — at a price of US$1,24 for diesel and US$1,32 for petrol.

The shocking fuel increases were announced by Mnangagwa himself — ahead of his much criticised trip to Eastern Europe — in a further clear indication that the biting petrol and diesel shortages are beginning to have dire political ramifications.

“Compounded by rampant illegal currency and fuel trading activities, government has today decided on the following corrective measures ... with effect from tonight, a fuel pump price of of $3,11 per litre for diesel and $3,31 for petrol will come into effect,” a sombre Mnangagwa said.

“The prices are predicated on the ruling official exchange rate of 1:1 between the bond note and the united States dollar, and also on the need to keep fuel retailers viable,” he added.

The hike comes after Mnangagwa’s under-fire government held an emergency meeting last week in a bid to try and find solutions to the country’s worsening fuel crisis.

The acute fuel shortages have seen many passengers struggling to get transport to and from work, as well as other destinations.

This, coupled with steep transport fares, has left thousands of commuters stranded — forcing many people to hitch precarious rides on lorries and pick-up trucks.

Instead of carrying passengers to and from their destinations, most commuter omnibus and long distance buses have been spending endless and often fruitless hours queuing for diesel at the country’s dry fuel stations.

The debilitating fuel shortages have also prompted desperate calls from stressed business leaders who want authorities to allocate them special supplies to stop the country’s burning economy from imploding altogether.

A top businessman who spoke to the Daily News on Sunday late last night said the sharp increase in the prices of petrol and diesel was “an act of desperation that was unlikely to be the panacea for the country’s long-winding fuel queues”.

“If anything, the situation could get worse as the government has signalled to the market that it has no solution to the crisis.

“But perhaps even more importantly, but in a negative sense, this has a massive inflationary impact and will definitely see another sharp rise in the prices of goods and services in the country. It’s a mess,” he said.

Interestingly, last night’s fuel price increases came hardly a week after Zimbabwe’s energy regulator had lowered prices in its January 8 review — a move which was based on a new pricing formula that is in line with a government pledge to cut prices to tackle the ever rising cost of living in the country.

Predictably, this stunt worsened fuel shortages in the country, amid rising tempers and skirmishes at petrol stations.

The price slash saw diesel, which was previously quoted at $1,34 per litre, being lowered to $1,25 a litre, while petrol — which was at $1,38 — went down to $1,32 per litre.

Amid the fears that last night’s fuel hikes would push up the prices of basic goods dramatically, Mnangagwa — who was flanked by Finance minister Mthuli Ncube, his deputy Constantino Chiwenga, acting Energy minister Perrance Shiri and the chief secretary to the Presidency Meshack Sibanda — said in his late State House address yesterday that the government did not anticipate that business will hike price further.

To avert a general price hike of basic goods, the government would award rebates to manufactures, mines, the agricultural sector and transporters to cushion consumers.

However, the president did not give a clear and detailed bried of how these rebates would work in practice — merely saying that these would be availed in due course.

He also claimed that there were “leakages” within the fuel market, adding ominously that the government would embark on a “comprehensive audit of all fuel draw-downs” to find out the points of leakages.

“Where criminal conduct is apparent, the law will take its course,” he said.

Speaking about his impending business trip to Eastern Europe, he said the planned bilateral talks would focus on energy, mining, agriculture and technology transfer.

Mnangagwa leaves for the four countries — Belarus, Azerbaijan, Kazakhstan and Russia — today, before making his second appearance at the prestigious annual gathering of world leaders, economists and captains of industry at the World Economic Forum (Wef), in the resort town of Davos in Switzerland.

He also revealed that a business delegation was tagging along with him, saying the jaunt was key because “Zimbabwe cannot go it alone.”

However, the trips have drawn fire from many quarters as they are seen as a sign that his engagements with the West and multilateral institutions are dead in the water.

The under-fire 76-year-old Zanu PF leader is leaving amid escalating pressure from long-suffering Zimbabweans — including restless government workers and ordinary citizens — who are reeling from the country’s latest economic meltdown.

It also comes as the government is working frantically to try and avoid a full-scale strike by all civil servants who are demanding to be paid their salaries in United States dollars — demands which have been made robustly by doctors and teachers who are on industrial action already.

Mnangagwa also said last night that he was cobbling together a “package of measures” to ease the pain of public sector workers pending a more substantive cost of living adjustment package by April 2019 — in line with Ncube’s 2019 budget statement.

At the same time, Mnangagwa also launched an emergency appeal for food from donors, saying that an El Nino-induced drought was scorching crops and killing livestock in the country.

He said agriculture output was, as a result, projected to be slashed significantly.

Zimbabwe is in the grip of a ginormous economic crisis which has seen the prices of basic goods rising sharply and long-forgotten fuel queues resurfacing.

Apart from the shortages of fuel and other basic goods, the government has also had to contend with myriad problems in the health sector, such as shortages of critical medicines.

Many government critics say the economic measures that were unveiled by authorities in October last year are at the centre of the country’s troubles.

Mnangagwa, who was feted like a king when he replaced Mugabe in November 2017, initially lifted the mood of crisis-weary Zimbabweans who were hopeful at the time that he would turn around the country’s economic fortunes.

However, the post-July 30 election shootings — which left at least six civilians dead when the military used live ammunition to quell an ugly demonstration in Harare’s central business district (CBD) on August 1 — was seen as having dented his international image significantly, in addition to harming his chances of getting financial support from Western countries.

Comments (8)

The junta announces fuel prices flanked by vice junta and the entire coup plotters. I hope the country comes to a halt and we get governed by competent people we actually vote for not these manipulators

Moe Syszlack - 13 January 2019

This the sadness of black so called leadership in the Motherland. Only a incompetent and entitle bafoon would double the price of fuel the number one needed commodities for a country to operate from the VP down to retarded Ministers they are destruction at their best. My brother ED is just sad and now has become publically heartless to his own people that believed he would make real change be only offers excuses and badly and self serving policies to put people of Zimbabwe into a deeper state of suffering.

Neteru - 14 January 2019

Ko kuzorora ?? , moyenda zvenyu Devos in private. Nyika hayina kumira mushe....munozviwona muri kunze.

Zororai baba ngwena - 14 January 2019

Ko kungoti ngwena fuels pane puma. Brand yekamba yebhutsu , vanogona kuyenda ku koti kunoti ayiwa makaba.

Business brands - 14 January 2019

For how much longer are we going to put up with this corrupt zanu pf regime? When will we grow enough courage to get rid of the loathed crooks for good ?

Ken Sharpe - 15 January 2019

We have a military dictatorship putting in party regalia - pure and simple. Heartless, clueless, callous billionaires kin on enhancing and protecting their wealth. Abusing the people - extracting all their strength, all their breath, all their futures. God help us! Zimbabweans...the first step is spiritual victory. Let's pray this regime out of power! God can! God will! God is in it!

Zum - 16 January 2019

The tragedy for Zimbabwe is that ZANU PF, the ZANU PF brand has been dragged into the mud. The ZANU PF I know is measured and values life. After winning 38% of the Vote in the disputed 2018 polls, one wonders how many votes would be required to rig the next election. Will the chiefs, headman, the youth remain willing tools of the military dictatorship?

Zum - 16 January 2019

Is the Daily News on strike with news that is about 5 days out of date comrades ?

ace mukadota - 16 January 2019

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