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Fuel increase to push inflation up

Augustine Mukaro/Grace Kombora

POLITICAL and civic groups have warned that recent massive fuel price increases would push workers out of employment, stoke inflation and make life unbearable for the ordinary


Opposition MDC secretary for economic affairs Tendai Biti said the 120% increase in the price of fuel – from $10 000 to $22 300 a litre for petrol and from $9 600 to $20 800 for diesel – is yet more testimony to the bungling incompetence in the economic management of the country.

The price of crude oil has risen so dramatically on world markets that some increase in the fuel price was inevitable. But while neighbouring countries are concerned about the implications of modest increases of less than 5%, Zimbabweans have to face the consequences of steep triple-digit increases.

Biti said a large increase in the price of liquid fuels is the most certain way to further impoverish the Zimbabwe population.

“It is not just the price of commuting which goes up when the fuel price is raised, but the price of transport and hence the price of every single commodity bought by industries and by consumers,” Biti said.

“The fuel price is the most pervasive of all prices in adding to the momentum of overall inflation in the economy. Over the last two years fuel in Zimbabwe has increased by about 7 500%.”

Biti said out of already meagre wages, workers are now supposed to pay higher fares for getting to work and higher prices for basic foodstuffs.

“Consumer Council figures for the minimum expenditure basket for a low income family of six was $6,9 million in August 2005. How many people are earning anything like that amount?

And the $6,9 million was before this latest fuel price increase and the 100% increase in electricity tariffs,” he said.

Zimbabwe Congress of Trade Unions (ZCTU) president Lovemore Matombo said increases in fuel of such magnitude should go with the adjustment of salaries and wages to cushion the ordinary workers from the hardships it would cause.

“The cost of going to work will now be expensive to the extent that it is cheaper to stay at home,” Matombo said.

“The situation would force people to opt out of employment. Development in a country is associated with a happy workforce, a situation which government is not considering.”

He said the increase in fuel by such a margin illustrates that Zimbabwe had reached a dead end.

Matombo said the worst affected groups are the civil servants who government had not given a salary adjustment to since the beginning of the year.

The Secretary-General of the PTUZ, Raymond Majongwe, said the government had already shown that it does not have the resources to award a cost of living adjustment to civil servants until 2006.

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