The GOVERNMENT has committed to ensure that fuel prices do not spiral out of control in the face of global value chain disruptions.
Writing in his weekly column published in this paper today, President Mnangagwa said various interventions have been implemented to ensure that the price of petrol and diesel remains affordable.
“Upon realising the turbulence in the fuel market, I directed that duty on fuels be reduced by US 13 cents. As I write, diesel is now zero-rated, duty-wise. I did more. From the President’s Strategic Reserves, I released 30 million litres of fuels to ensure the supply in the market remains stable and affordable.”
In an interview yesterday, Energy and Power Development Permanent Secretary Engineer Gloria Magombo said the work around managing fuel prices is in course.
She said that although there were variables out of the country’s control which contribute to fuel prices, authorities are doing their best to manage what is within their reach.
One of these measures include the reintroduction of mandatory petrol blending, which was halted in January due to low ethanol stocks.
Currently Zimbabwe is blending its petrol at E-10, and there are indications that it may grow.
ALSO READ:ZERA increases fuel prices
This is a result of the reintroduction of ethanol blending, which is one of our key import substitution measures. We had to temporarily stop blending due to low production, but the ethanol production is improving and we have reintroduced blending,” she said.
Petrol is retailing at US$1, 63, while diesel is selling at US$1, 71. The highest blending ratio achieved by Zimbabwe so far is E-20.
Eng Magombo said the Statutory Instrument, which guides how fuel prices are calculated, will cushion motorists from wanton fuel price hikes.
“There are things we cannot control, like Free-On-Board costs which are internationally determined.
“However, where we can make adjustments like taxes and blending ratios, we will continue assessing the situation to see how we can make sure fuel prices remain within reach of many,” she said.
Zimbabwe’s prices, she explained, are structured according to the Statutory Instrument (Statutory Instrument 270 of 2019). The Statutory Instrument, she added, is clear on when and how prices are calculated.
Asked to explain why fuel that is supposed to be sold in local currency is not widely available, Eng Magombo said:
“Local currency fuel is there, but most of it is going towards national projects around the country. Only 17 percent of our local currency fuel is being released to private motorists.
“Zupco buses are also getting preference, this is how they are able to charge affordable fares.”
The Russia-Ukraine war has caused value chain disruptions in the oil market.
Brent crude oil is currently priced at US$107 per barrel, almost thrice its price in 2020.
Source: Sunday Mail
