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Monday, October 3, 2022
HomeNewsThird Force Manipulating Fuel Prices: ZIMCODD

Third Force Manipulating Fuel Prices: ZIMCODD

THE Zimbabwe Coalition on Debt and Development (ZIMCODD) has alleged that the country’s fuel sector is run by cartels influencing the regulator to set high prices to feed their profiteering motive.

ZIMCODD also accused government of treating the fuel sector which is a key industrial production enabler as a cash cow.

In its weekly review, ZIMCODD said although the Russia-Ukraine war has had repercussions on global fuel prices, in Zimbabwe, there was a third force driven by “profiteering” that was influencing prices.

“As such, the cartels, driven by a profiteering motive, can significantly influence the Zimbabwe Energy Regulatory Authority (ZERA) to set a high price to take advantage of elevated global prices,” said ZIMCODD.

“Apart from this, the government sees the fuel sector as a cash cow as it is collecting nearly 40% per litre of fuel sold as taxes and levies. Fuel is one of the key industrial production enablers hence a high price is a hindrance to economic activity,” the organization added.

ZIMCODD further noted that the prices of fuel in Zimbabwe was not reflective of the true global oil price dynamics as other regional countries including landlocked peers had better prices for the precious liquid.

“The Zimbabwean situation is peculiar when compared to its regional peers as the increases in fuel prices are excessive. After the invasion of Ukraine, domestic prices increased astronomically ahead of other landlocked regional counterparts that are net importers like Zimbabwe. These fuel hikes are not commensurate or reflective of true global oil price dynamics,” the ZIMCODD report read.

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Commenting on the fuel pricing in Zimbabwe, National Consumer Rights Association spokesperson, Effie Ncube said fuel prices were not being decided by market forces.

“Unlike the prevailing regional trends, the pricing models for fuel in Zimbabwe are distorted by cartel pricing, shortages of foreign currency, the ever-declining Zimbabwean currency, and all these issues have contributed to higher average fuel prices in Zimbabwe compared to countries like South Africa. The politically-connected cartels are engaged in price-fixing in which fuel prices are now decided in the boardrooms of criminal enterprises, resulting in artificially-set prices,” Ncube said.

The Zimbabwe Energy Regulatory Authority (ZERA) recently announced new diesel and petrol prices effective 25 April 2022.

Diesel now costs US$1.71 and ZWL$264.77 per litre while the price of petrol has been reduced to US$1.63 and ZWL$252.40 per litre.

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