Price of fuel set to rise

GOVERNMENT, in agreement with petroleum suppliers, is planning to increase the price of fuel to a minimum of US$1,40 a litre with effect from tomorrow after Finance minister Tendai Biti introduced a four-cent fuel levy on importers using road transport.

The sharp rise is likely to push up prices of commodities and services across the board.
Minister of Energy and Power Development Elton Mangoma yesterday told the Zimbabwe Independent that a Fuel Pipe Line Levy on road importers would be charged from tomorrow.
However, several fuel dealers around the country have already effected a fuel price hike. In Harare petrol is ranging from US$1,33 a litre to US$1,38, while in Bulawayo most service stations have in the past two weeks hiked prices to between US$1,40 to as high as $1,53 per litre. Only a few filling stations with stock in Bulawayo were charging US$1,30 a litre.
Just at the beginning of the month, petrol was US$1,23 per litre. The diesel price will go up to US$1,24 per litre from US$1,06.
Mangoma said the January increase was mainly meant to ensure constant quality fuel, curb smuggling and also generate revenue.
“As of January 1, a Fuel Pipe Line levy of four cents per litre would be introduced to all fuel importers not using the Beira-Feruka pipeline,” said Mangoma.  “All road importers not using the pipeline would have to obtain a licence from government”.
However, the minister said there would be a slight effect on the pump price as they have reached an agreement with fuel suppliers to peg the petrol price at $1,40 a litre.
Fuel dealers said the recent price increase was as a result of rising crude oil prices on the international market and “logistical problems at Mozambique’s Beira port from where Zimbabwe gets most of its supplies”.
They said rising water levels at the Mozambican port are making it difficult for ships to dock, resulting in delays in fuel delivery.
An official with the National Procurement Committee yesterday said the increase could be due to a recent rise on the international market.
“Despite the fuel levy, prices on the international market are projected to rise to as high as $95 per barrel.  Naturally this would result in prices rising locally,” said the official.
Crude oil prices on the international market this week inched closer to US$90 per barrel but for a greater part of the year it was trading in the US$70s.
The cost of crude oil and refined petrol and diesel on the world market is influenced by a number of factors, including global demand, supply, and political events and manufacturing capability.
Crude oil makes up a significant portion of the cost of fuel and is traded in US dollars as a commodity on the international market.
Refineries purchase crude oil on the international market to refine it into petrol and diesel. Refined product is also traded on the international market and has its own pricing.

 

 

Nqobile Bhebhe

Top