CABINET has approved the elimination of multiple fuel pricing, Finance minister Herbert Murerwa said yesterday.
rnment introduced multiple fuel prices through subsidies for different sectors of the economy such as farming and the transport sector.
“Cabinet has approved a fuel price trigger mechanism and a revised facility for farmers that is based on actual use in support of production,” Murerwa said during his mid-term fiscal policy review.
“The government will be implementing a gradual movement towards the elimination of multiple fuel prices in line with cabinet’s position.”
Farmers were buying fuel at a heavily subsidised price of $11 000 per litre while public transport operators were getting their fuel at $22 500 per litre. The general public was buying fuel at between $450 000 and $600 000 per litre.
The minister said stakeholders had made strong representations on the need to devalue the Zimbabwe dollar for them to viable adequate returns.
He said in the mining sector production costs were affecting the viability of the sector with gold threatened by a further decline.
“Revenues have remained constrained by the fixed value of the Zimbabwe dollar hence strong representations over the industry’s viability have been presented to government,” Murerwa said.
He said consultations with tobacco farmers had revealed that the current 35% early delivery bonus was not enough to enable them to venture into tobacco farming in the next season.
Murerwa said Reserve Bank of Zimbabwe governor Gideon Gono would make the necessary announcements soon to help tobacco farmers.
He added that Gono had reduced statutory reserve thresholds for financial institutions which have made commitments to increase their support for agriculture.
On maize, the Finance minister said government will shortly announce a new maize selling price.
“Following the increase in the maize producer price to $31,3 million per tonne, cabinet approved the adjustment of the maize selling price from the current $600 000 per tonne and the necessary announcements will be made shortly,” he said.
Murerwa said farm disruptions had undermined the banking sector’s confidence to finance farming operations.
Banks required guarantees that when they finance crops, farmers would be able to harvest and repay their loans.
“To this end, government will take a firm stand against any new, unwarranted disruptions on farming operations,” he said.