Retail fuel prices in Zimbabwe are now dropping, with petrol now selling at US$1,39 to US$1,42 a litre and that of diesel around US$1,28 to US$1,31 a litre following a drop in the prices of crude oil over the last six months and despite an increase by 10c a litre in the taxes on fuel.
Most oil companies and retailers are now selling fuel below the maximum prices set by the Government of US$1,44 a litre for petrol and US$1,32 per litre for diesel as the competitive environment shaves margins.
Government raised taxes and set new maximum prices on Saturday through a joint statement by Finance and Economic Development Minister Patrick Chinamasa and his Energy and Power Development counterpart Minister Samuel Undenge.
The joint statement read: “Following reports made with regards to fuel prices over the past few days, it has become necessary that we, on behalf of Government, jointly issue this Press statement,” they said.
“Global developments indicate that oil prices have been on the decline. Government and industry, through a consultative process, have realised scope to facilitate adjustments of domestic fuel prices downwards.
“In this regard, Government has evoked Statutory Instrument No. 4 of 2015 to share the benefit arising from the decline in fuel prices, between national programmes and the market, as has been done in other countries. Consequently, excise duty on petrol has been adjusted from US$0,35 to US$0,45 per litre while that for diesel has been adjusted from US$0,30 to US$0,40 per litre.
“Taking into account the cost build up and the excise duty adjustments, the maximum retail prices of fuel has been adjusted to US$1,44 per litre for blended petrol and US$1,32 per litre for diesel.
“It should be noted that these prices provide a guide as maximum prices and fuel retailers are expected to charge prices lower than the stipulated maximum prices. These adjustments are with immediate effect.”
A survey by The Herald in Harare yesterday indicated that fuel dealers complied with the directive with Engen Service Station charging US$1,39 and US$1,30 per litre for petrol and diesel respectively.
At Redan, petrol cost US$1,41, while diesel was at US$1,31 and at Sakunda they charged US$1,42 and US$1,31 per litre for petrol and diesel respectively.
At Total, petrol cost US$1,44 per litre while diesel was pegged at US$1,32.
Before the new dispensation, the pump price for petrol was as high as US$1,57 per litre at some filling stations while that of diesel was at US$1,47.
Government initially ordered fuel sellers to reduce petrol and diesel prices to a maximum of US$1,32 and US$1,20 respectively after it emerged that global oil prices had come down by about 50 percent between June and December 2014.
However, motorists could not enjoy the significant price reduction as Government immediately increased excise duty from US$0,35 to US$0,45 per litre for petrol while diesel excise duty increased to US$0,30 to US$0,40 per litre.