THE Zimbabwe Energy Regulatory Authority (Zera) has said current fuel prices are within the levels allowed by the law.
In a statement, Zera chief executive officer Gloria Magombo said the regulator monitors fuel prices on a weekly basis through its surveillance mechanism.
“The prevailing fuel prices in the country are within the provisions allowed by the Statutory Instrument 80 of 2014 which provide the pricing slate,” she said.
“The fuel prices in the country have also been falling in response to the decline in the international prices of crude oil.”
Magombo said prices in different countries were affected by various factors such as government policies on fuel taxes, fuel supply chain structure (whether there is a refinery or not), fuel stabilisation mechanisms, whether landlocked or not (transportation); subsidies and exchange rate against the United States dollar.
“It is, therefore, inappropriate to simplistically compare prices in Zimbabwe against other countries in the region as they have different tax regimes, statutory payments as well as different economies,” she said.
“Zimbabwe also experiences a lag in terms of benefiting from the international fall of fuel prices due to the long period it takes to transport fuel from source to retail. Other procurers secure 3-6 months fixed price contracts as a way of hedging against price increases.”
The country experienced price increases from August to September this year as a result of an additional 5 cents per litre duty introduced by the government.
Magombo said petrol prices as of December 4 2014 were reduced to between $1,49 per litre and $1,53 per litre.
Diesel prices were reduced from around $1,44 per litre to between $1,38 per litre and $1,41 per litre during the same period.
She said fuel price surveillance and monitoring trends revealed that blend prices were as high as $1,56 per litre and diesel was around $1,48 per litre at the beginning of November 2014.
It should also be noted that although the local fuel is blended, ethanol for blending is pegged at $1,00 per litre including 5 cents per litre which is excise duty.
“Tax and duty on fuel are other revenue streams that fund government programmes and operations, hence statutory payments constitute a major component of the fuel cost. These are not the same in every country,” Magombo said.
The average international price of Brent crude oil fell by around $70 per barrel (bbl) from an average of $87/ bbl to the current level of $80/bbl.
Since mid-June, Brent oil prices have fallen by more than 30% with panic over abundant supplies in the world economy as a result of a rise in output from shale oil and other unconventional sources and a strong US dollar.
As of December 4, South Africa had the lowest prices of fuel with diesel at $1,11, while petrol stood at $1,25 per litre.
Zimbabwe had lower prices compared to Zambia and Malawi.
Diesel and petrol in Malawi were pegged at $1,73 per litre and $1,71 per litre respectively, while diesel and petrol in Zambia were pegged at $1,53 per litre and petrol $1,63 per litre.