ZERA slashes fuel prices to US$1,98 per litre ,but public feels it’s still too high
Business Reporter
The Zimbabwe Regulatory Energy Authority (ZERA) has reduced fuel prices to below US$2 per litre for both diesel and petrol following the reopening of the Strait of Hormuz and the stabilisation of global crude oil markets.
Diesel prices retreated to US$1.99 per litre from US$2.09 while petrol prices fell to US$1.98 from US$2.08.
This development which will bring relief to motorists and businesses is expected to culminate into the reduction of prices of goods and services in the medium term to long term.
In a statement, ZERA said the prices are effectively from June 19 2016 to a period of two weeks as the government continues to cushion consumers from effects of geopolitical tensions.
Addressing delegates at the Annual Chamber of Mines Conference yesterday, Energy and Power Development Minister July Moyo said Government was actively reviewing fuel prices in line with improving conditions on the international market while remaining committed to guaranteeing uninterrupted fuel supplies.
“In the petroleum sector, you have seen what we have been doing. We increased prices when we were hit by the Straits of Hormuz, we were very hard hit here in Zimbabwe. When you look at the percentages, what we increased from where we were is the same as what everybody else increased, but we already had a petroleum product which was higher than normal, and we have maintained to say we need security of supply.”
He said President Mnangagwa directed his ministry to prioritise fuel security amid Middle East tensions.
“We don’t want any queues anymore after the President eliminated them. But there is the cost side of things that we are tracking, and we hope that we can decrease. You will see that this week, we are now below US$2 and we think the reviews that we are doing will lead us to where we need to go,” Moyo stated.
According to him, government would continue closely monitoring developments on the international market to ensure Zimbabweans benefit from ongoing stability in global oil prices.
The Strait of Hormuz, a vital shipping route through which roughly a fifth of the world’s oil supplies pass, became a flashpoint during heightened tensions in the Middle East, triggering supply concerns and sharp increases in global crude oil prices.
The disruption saw Brent crude prices rise above US$100 per barrel, pushing local fuel prices to about US$2.23 per litre for petrol and placing additional pressure on households and businesses.
Throughout the period of uncertainty, Government maintained that safeguarding fuel availability remained its top priority.
Authorities introduced market-sensitive pricing measures while ensuring the country retained fuel reserves sufficient for more than three months.
Government also introduced tax relief measures and increased fuel blending ratios from E5 to E20 as part of efforts to cushion consumers and stabilise pump prices.
Recent trends, however, point to a reversal of the earlier surge, with global oil prices easing significantly as supply chains normalise following the reopening of the Strait of Hormuz.
Currently brent oil prices are at US$77.99 per barrel from US$120 a month ago.
Fuel industry players, consumers and businesses have welcomed the downward adjustments, saying lower prices will provide much-needed relief to all sectors of the economy but the adjustments need time.
