HomeLettersFuel story facts incorrect

Fuel story facts incorrect

I WISH to advise that the analysis of the fuel price situation by your correspondent “Fuel crisis spreads…”, (Zimbabwe Independent, April 29) was not quite correct.

rif”>The norm for most countries of the world is that the price of fuel is about 50% of government excise duties. That puts governments in positions good enough to get as much money as possible from fuel consumption.

Your talk about government subsidies therefore assumes that the government is not taxing the fuel imports, which can perhaps happen when the importers get the fuel from across the border with the foreign country excise duty component already included.

Your correspondent’s attempt to compare the price of fuel to mineral water, milk and fizzy drinks can only stand the test in Zimbabwe, not elsewhere.

Where I am at the moment, petrol is currently quite expensive at N$1,29/l. A 600ml bottle of coke is $2,65 while a 500ml of milk is somewhere around $1,60, while a bottle of mineral water trades on average at $1,80 or thereabouts. Bread costs about $2.

This is a country where the excise duties are roughly 50% of the cost of fuel. As such, your correspondent’s report simply justifies a potential fuel price hike by government.

I think the truth is probably that government is now not getting profits as high as it used to get from fuel imports. If by subsidies your correspondent meant that government is cutting its share of fuel taxes, that would make sense.

If your correspondent thinks I am wrong, then let him speak to a cross-section of the fuel barons and get the facts right.

Patrick Mlambo,

New Zealand.

Recent Posts

Stories you will enjoy

Recommended reading