Govt hikes fuel prices

06 Apr, 2021 - 00:04 0 Views
Govt hikes fuel prices

eBusiness Weekly

Business Writer
Fuel prices went up with effect from Monday this week in line with the weakening exchange rate and rising world oil prices.

Motorists will now have to part with US$1,34 for a litre of petrol, up from US$1,30 since March 5, 2021. Diesel remains unchanged at US$1,32.

In Zimbabwe dollar terms, petrol will retail at $112,96 from $109,17 while the pump price for diesel moved up slightly to $111,77 from $110,41.

Even though brent crude oil price at US$64 a barrel has fallen below recent peak of US$69,95 per barrel, the price is still above beginning of the year of approximately US$52.

Analysts say while the government and the central bank were using a monetary targeting framework to keep the exchange rate and prices in check, the country could still suffer from cost push inflation including imported inflation from fuel.

There is continued pressure on the cost of doing business and this has seen prices of basic commodities going up in the last couple of weeks.

Confederation of Zimbabwe Retailers president Denford Mutashu, told a local radio station on Sunday that prices of basic commodities have significantly increased in the past few days.

He said suppliers and manufacturers indicated the continued pressure on the general cost of doing business in the economy owing to increases in fuel.

“Tollgates have also gone up, and the general cost of procurement of raw materials that has continued to push prices to the north.

“Statutory increases as well as local licences such as shop licenses that have shot up dramatically have also contributed,” Mutashu said.

Some analysts have, however, called on Government to reduce the cost of fuel taxes to cushion the consumer and business from inflationary pressures caused by fuel price increases.

Taxes and levies on fuel constitute almost US50 cents of the total fuel prices, resulting in fuel becoming more in Zimbabwe compared to the region.

Cutting fuel prices could thus be a smart stimulus package given adverse economic impacts of Covid-19 to both businesses and the consumer.

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