HomeBusiness DigestNIPC wants to control fuel price

NIPC wants to control fuel price

THE National Incomes and Pricing Commission (NIPC) has put in a proposal to government to be allowed to control the price of fuel and other related products.

The NIPC wants to control the price of petrol, diesel, paraffin and other oil products.

The NIPC chairman, Godwills Masimirembwa, told businessdigest this week that the commission has been looking for ways to control the fuel sector which until now has been allowed to operate without government interference since partial deregulation of the industry in 2005.

“The NIPC is mandated to control the prices of everything including fuel. It is unfortunate that we are not in control of those prices at the moment,” Masimirembwa said.

“We are in the process of negotiating with the parent ministry and stakeholders to find a lasting solution to the fuel pricing issue.

“We want to achieve some stability in the industry because fuel is a very important component of the cost build-up in every product.”

Although Masimirembwa refused to give the specific modalities of the plan, businessdigest understands that the NIPC submitted its plan to the Ministry of Energy and Power Development. Sources said the ministry has promised to make a decision within the next two weeks.

The sources said the ministry was not against the idea but is hesitant about the effects that the decision will have on the supply side.

Every time government tries to fix the price of fuel, supplies immediately dry up.

It however emerged last night that most private fuel companies have not yet been consulted by the NIPC and the energy ministry over the plan.

“They have not come to us with that proposal,” said a senior executive with a local fuel company.

According to the plan the NIPC-approved fuel prices will hold for 30 days. Although the NIPC plans to use the parallel market rate players in the industry have warned that any attempt to fix the price could lead to massive shortages that could cripple industry.

The other problem is that the NIPC wants the fuel price to hold for a month at a time when the exchange rate is changing everyday due to the shortages in the market.

For example, since the start of the month the United States dollar rate on the parallel market, the main source of foreign currency for the fuel sector, has moved from US$1:$4,5 million to about US$1:$11 million.–Shakeman Mugari

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