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Tinashe Makichi Harare Bureau
Zimbabwe Coalition on Debt and Development (Zimcodd) yesterday said failure by Zimbabwe to make meaningful adjustment on fuel prices means that the possible ripple effects of the declining global oil prices cannot be realised as noted in other countries like South Africa. On January 10 this year, Energy and Power Development Minister Samuel Undenge directed that fuel prices in Zimbabwe should go down in line with global and regional trends. Ordinary Zimbabweans welcomed the proposal with the hope that there will be a reduction in petrol and diesel prices, some people actually dreamt far hoping for a transport fares and general goods price reduction.

Other government organs like the Ministry of Tourism and Hospitality Industry also supported the move.

The prices for a barrel of oil on the international market have been going down since mid 2014 from $118,18 to an average of $50,00.

The joy was short lived when the government increased the excise duty on fuel by $0,10 per litre. Global developments indicate that oil prices have been on the decline. The government and industry, through a consultative process, however realised scope to facilitate adjustments of domestic fuel prices downwards.

In this regard, the government has evoked Statutory Instrument No. 4 of 2015 to share the benefits 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 had been adjusted from $0,35 to $0,45 per litre while that for diesel had been adjusted from $0,30 to $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 $1,44 per litre for blended petrol and $1,32 per litre for diesel.

Zimcodd noted that the excise duty increase affects the final consumer at most.

“There must be wider and inclusive consultation by the government for various stakeholders in matters that affect citizens is critical in policy processes.

“Policy inconsistencies need to be addressed to avoid inconveniences to industry and final consumers,” said Zimcodd.

“The government should align its policies in response to positive regional and global trends.”

The local NGO said the government should have progressive taxation policies that benefit ordinary citizens.

The cosmetic reduction of prices from an average price of $1.52 to $1.44 per litre for petrol and $1.44 to $1.32 for diesel respectively, does not bring meaningful benefits for the ordinary Zimbabweans especially since it is against the backdrop of a $0,10 increases in excise duty.

“Put into perspective, where Zimbabweans could have enjoyed a heavy $0,20 reduction on fuel prices, this can no longer be realised following the $0,10 increase in excise duty.

“For instance according to the earlier directive by Minister Undenge, petrol would be selling at $1.32 per litre and diesel $1.20 per litre,” said Zimcodd.

“It’s interesting to note how other countries like our neighbour South Africa have already begun to enjoy the benefits of reduced global petroleum prices.”