Why Zim fuel price shot up

Business Top Stories Zimbabwe

·      Zera speaks on latest move

·      It was inevitable, they say

Leroy Dzenga

THE Zimbabwe Energy Regulatory Authority (ZERA) says movements on the interbank market and increased costs necessitated the latest rise in fuel prices.

Fuel prices were hiked again on Monday, barely ten days after another rise was effected.

A litre of petrol now costs RTGS $7.47 up from RTGS 6.10 while the price of diesel has risen from RTGS$5.84 to RTGS$7.19 per litre.

RTGS$8.95 is equivalent to US$1 at the current interbank rate.

ZERA CEO, Mr Eddington Mazambane, told ZTN that an upward review was inevitable.

“There are two issues, Free On Board (FOB) costs have increased and they are denominated in United States dollars. These are global charges and are beyond our control,” he said.

Free On Board costs are costs incurred by an importer to ensure that goods are delivered to them within specific times and using agreed routes.

FOB costs carry components like insurance and places the liability of damage with the seller until delivery.

ZERA argues that the announcing of new fuel prices regularly is not a new principle.

 “If you remember during the US dollar days we used to announce price increases almost every week. But the difference is, these numbers are now appearing to be big in our local currency.” Mr Mazambane said.