The Zimbabwe Energy Regulatory Authority (Zera) has hired a South African company, Genesis Analytics, to help them review pricing models within the petroleum sector, amid complaints from consumers of uneven charges compared to other regional countries.
BY TATIRA ZWINOIRA
Zera chief executive officer Gloria Magombo told an inaugural Petroleum Sector Pricing Study stakeholder workshop that the authority had hired the South African firm to come up with a model, which would be presented to stakeholders in the petroleum sector. The current fuel pricing scheme, the fuel cost build-up, was adopted in 2009.
Genesis Analytics will develop appropriate pricing mechanisms in methodology and models, striking a balance between consumer protection and industry sustainability and examining costs and margins at each level of the supply chain.
“One of the biggest challenges we have had over the past couple of months was assuring the public that the pricing methodology, which we have is responsive to any other external forces, if able to respond timeously to that,” Magombo said.
“We thought that it is time we reviewed that methodology and review the cost build-up; we look at what it is that is happening from the sources of origin to the final point of consumption.”
She said it had come to the attention of Zera that different players were not pricing according to international changes in the petroleum industry, especially in petrol, diesel and just recently, gas.
“We would want to benchmark the fuel sector pricing in Zimbabwe with regional and international best practices and also advise on the efficient fuel pricing structures to ensure the petroleum supply is reliable, adequate, and sustainable, while the retail prices are fair,” Magombo said.
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“We would want to review and advise on the relevant capital administration operational costs and also look at allocation to the different costs to different players within the supply chain.”
Yesterday’s stakeholders meeting in the petroleum industry was in response to claims made within the sector that some players could be holding prices at artificially high levels even when they knew it was feasible to lower the prices.
Energy and Power Development secretary Patson Mbiriri said the ministry had of late noted “huge variances in the prices charged by retailers”.
“Prices are expected to be two or three cents higher in locations further away from Harare because of the higher costs arising from the longer distribution distances from Msasa. However, we have noted huge differentials, some as high as 10 cents per litre, between service stations in Harare,” he said.
Petroleum product prices are currently determined in accordance with Statutory Instrument 80 of 2014, which provides the framework for the pricing of fuel.
