Latest News Editor's Choice


News / National

Fuel price hike linked to exchange rate: Zera

by Staff reporter
08 Apr 2020 at 07:54hrs | Views
THE Zimbabwe Energy Regulatory Authority (Zera) says the latest fuel price increase has been caused by the recent adjustment in the forex exchange rate, which is now fixed at US$1:ZWL$25 on official platforms.

The Reserve Bank of Zimbabwe (RBZ) has also granted the greenlight for consumers and businesses to trade in foreign currency and suspended, until further notice, any increase in charges related to the provision of electronic payments. The interventions are part of monetary measures in response to the financial vulnerabilities caused by Covid-19.

In this regard Government has shelved the 'managed floating exchange' model and adopted a fixed exchange rate system pegged at interbank level of ZW$25 to the US dollar.

This has seen Zera increasing the pump price of diesel and petrol. "Please be advised that the fuel prices effective 05 April 2020 are as follows: maximum pump price for diesel ZWL$21,52, blend E5 ZWL$21,77 per litre.

"Operators may, however, sell at prices below the cap depending on their trading advantages," said the energy regulator.

Speaking by telephone yesterday, Zera acting chief executive officer Mr Eddington Mazambani said: "The causes of the increase is the exchange rate. Remember our previous price was pegged at ZWL$18,42 and now we have got an exchange rate of ZWL$25 to the dollar (United States) and then duty on petrol.

"And duty, when we had the previous price regime (before the latest price adjustment), it was ZWL$4,26 for diesel, ZWL$4,44 for petrol, it's now ZWL$5,82 diesel and ZWL$7,28 for petrol."

Mr Mazambani said when looking at the prices in US dollars, the country is far below the regional comparison.

"Our prices are way below a dollar. In actual fact, if you look at the previous prices in dollars, it's more than the prices we have now in US dollar terms. "So, as much as the prices might have increased in RTGS form, in actual fact in US dollar terms, the prices have actually come down, which is in line with the international trade.

"It's just that the exchange rate moved and also the duties moved," he said.

Meanwhile, crude oil prices have plunged to US$20 per barrel, which is the lowest since 2002, on the back of low demand due to a global lockdown on coronavirus fears. The Organisation of the Petroleum Exporting Countries (Opec), and Russia were expected to meet this week to discuss oil output cuts until Thursday.


Source - chronicle

Subscribe

Email: