FUEL prices will continue to rise on a weekly basis in tandem to the volatility on the currency market, the Zimbabwe Energy Regulatory Authority (Zera) has warned.
Zera chief executive officer Eddington Mazambani told the Parliamentary Energy and Power Development Portfolio Committee on Thursday, that global crude oil prices also affect the prices in Zimbabwe while costs of insurance and freight as well as changes in monetary policy have played havoc with the market.
Fuel prices have gone up by 500% since January in Zimbabwe and early this year triggered violent demonstrations that left 17 people dead.
“We expect changes every week and prices are expected to increase weekly from the current $9.06 diesel and $9.01 petrol.
“The price of fuel has been going up internationally due mainly to relations between America and Iran and other oil producing countries. Pricing is not done by Zera but market forces are at play,” Mzambani said.
“Duty is contributing to fuel increases and those external forces I have mentioned. Issues to do with fixed based operators (FOBs), pipeline costs, financial costs plus the exchange rate, levies, administrative costs, handling and storage costs have all contributed to changes and increases in fuel prices.”
In his monetary policy review last week Finance Ministerr Mthuli Ncube announced a fresh levy would be charged on all crude oil products coming into the country and this is likely to be factored into the new price structure.
While the prices have continued to soar this has not translated to availability with queues still a common feature across the country. Mazambani argued that availability was dependent on government availing enough foreign currency to bring in fuel that he said was sitting in its millions at the Msasa holding depot in Harare.
“Availability of fuel relies on government’s ability to raise foreign currency in the country,” he added.
According to Mazambani, the exchange rate for fuel is at $9.50 but Zera has been using $7.50. He added that Zimbabwe’s fuel prices are still below the regional average with “Zambia at US$1.20 and South Africa just above that but Angola was at almost at par with Zimbabwe.”
Zimbabwe needs 1.5 million litres of petrol per day and up to 2.5 million litres of diesel per day.