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Business Reporter

ZIMBABWE Energy Regulatory Authority (ZERA) has announced a downward review of petroleum product prices with diesel now selling at US$1,74 per litre and blend petrol at US$1, 56 per litre.

The adjustment of fuel prices follows receding Brent crude oil prices on the international market.

Diesel dropped by 5 cents from US$1,79 per litre while petrol shed 9 cents from US$1,65 per litre.

According to statistics, international Oil prices retreated more than four percent on Tuesday to their lowest price since July 24 attributable to the strengthening dollar and increasing Organisation of Petroleum Exporting Countries (OPEC) exports, which have eased fears about tight markets.

Crude oil prices are fickle as they react to a number of variables, including supply and demand prospects and the perceived risk of market disruptions.

Brent crude oil yesterday closed below US$84 a barrel for the first time since October 7 2023.

According to experts a recovery in oil exports from OPEC has been adding to the pressure on oil prices.

The Treasury cut fuel levy on fuel imports last year to prevent any further cost-driven price increases in the country, which would exert pressure on inflation.

Normally, lower oil prices can be particularly beneficial for developing nations like Zimbabwe, which are heavily reliant on oil imports, as this helps them in reducing import bills while motorists and companies can also lower their fuel bills.

In Zimbabwe, mineral fuels and mineral oil products remain some of the country’s major imports, but encouraging progress on exploration for petroleum deposits could reverse this trend in the next few years.

“Although minute, this can alleviate financial pressures on individuals and businesses that rely heavily on oil-based energy.

“This can benefit industries such as transportation, manufacturing, agriculture, and chemicals, as they can produce goods and services at lower costs, leading to increased competitiveness and potentially higher profitability,” said Mr Doubt Chiorora, an economist.

Industrialist Padwell Chiimba said the tanking fuel prices were beneficial to local industry which has grown to be dependent on diesel generators owing to unsteady power supply.

“Although minor, this fuel price reduction in Zimbabwe means a lot because diesel has become an everyday need in the running of many companies.

“Lower fuel prices contribute to manageable operating costs. Fuel is a key factor in determining a company’s operational costs, so lower oil prices can lead to reduced production costs for industries that heavily rely on oil as a raw material or energy input,” said Mr Chiimba.

Countries that produce oil control supply in response to the broader economic environment by managing the price of oil.

Normally, when oil prices increase or decrease a ripple effect is felt in Zimbabwe, this is mostly evident when there is a fuel price increase, local suppliers are quick to factor in hikes in response to what will be happening on the global landscape.

The global benchmark settled at US$81, 61 a barrel, down by US$3, 57 while U.S. West Texas Intermediate crude futures settled at US$77, 37 a barrel, down US$3.45.