OIL importers are mulling a hike in the retail price of petroleum products, a move likely to spur another round of commodity price increases in the econo
my, businessdigest established this week.
The planned hike in the retail prices of petroleum products, which have however been spiralling weekly on the unofficial market, is a response to an increase in the National Oil Company of Zimbabwe (Noczim) debt redemption levy from $25 to $60 per litre.
Last month, Noczim requested government to review the levy in line with price fluctuations.
The levy was introduced through an amendment of the Finance Act in 2003 to assist Noczim in the payment of accumulated foreign debts.
“Noczim must be assisted to liquidate (its) debts. So the debt redemption levy should be adjusted according to price fluctuations,” Noczim CEO Zvinechimwe Churu said.
He said the fuel imports that had precipitated the rise in the foreign debt stock had been made “in the national interest”.
The Zimbabwe Congress of Trade Unions (ZCTU) said last week it feared that the tax concession Finance minister Herbert Murerwa had offered to workers would soon be wiped out as a result of the adjustment of the levy.
“This will result in the increase of the cost of fuel which will in turn have a knock-on effect on the retail price of goods and services,” the ZCTU said.
“It will further increase inflationary pressures, it is also tantamount to subsidising corrupt tendencies and mismanagement within the parastatal,” the union said in a statement.
The ZCTU added that the increase in fuel carbon tax from $5 per litre to $100, which represented a 1 900% increment, would also have harmful effects.
This would further erode workers’ disposable incomes, the ZCTU said.
Apart from the Noczim levy, government also made upward adjustment in the presumptive tax in a bid to increase revenue inflow.
Commuter transport operators’ presumptive taxes were also increased by between 900% and 1 400%.
There were fears in the market that this would ignite a rise in commuter fares, already considered too high.
Presumptive tax for commuter omnibuses with a carrying capacity of 15 to 24 passengers were raised from $6 000 to $90 000 per quarter while those with a carrying capacity of between 25 and 36 passengers were increased from $12 000 to $180 000 per quarter.