By Staff Reporter
The Association of Business in Zimbabwe (ABUZ) has commended Government’s directive to force local fuel retailers to reduce fuel prices.
Minister of Energy and Power Development, Dr Samuel Undenge gave fuel dealers a 14 January 2015 deadline to reduce fuel prices by almost 20% to $1,20 for diesel and $1,32 for petrol in line with the falling international crude oil prices.
The price of crude oil has been on a freefall since June last year where it was around $118 per barrel to $70 in December while freight on board (FOB) prices at Beira port stood at 0.57 and 0.52 per litre as at end of December.
In an interview on Wednesday, Abuz chief executive officer Dr Luck Mlilo said most fuel suppliers were reluctant to reduce prices despite declining crude oil prices in the international market owing to a culture of profiteering.
“We have been observing that fuel prices in countries have been going down very often but this culture of making excess profits is rampant in our country. People are no longer following business ethics, they want very huge profits, it is not always like that in business,” said Dr Mlilo.
Local fuel traders had partially adjusted their prices while others maintained an average $1,50 for petrol and $1,46 for diesel. As of Wednesday some filling stations in Bulawayo were gradually implementing the Government directive.
Dr Mlilo said since filling stations are reducing fuel prices, it means input costs for other businesses should also go down. He said the fuel price reduction should cascade down to every industry as fuel in an essential input cost to most businesses.
“Other sectors of the economy must be monitored so that they reduce their prices because fuel is an input cost in their businesses. Naturally, if it goes down it should cascade to other products,” he said.
Dr Mlilo said businesses should align their profit margins according to their costs of business to ensure that they adhere to proper ethics of doing business.