Zera must revisit zonal fuel pricing

By Editorial Comment | 01 Sep 2019 at 21:05hrs
THE new pricing of fuel based on regional zones announced by the Zimbabwe Energy Regulatory Authority (Zera) with cities and towns further from Harare paying more for the commodity is insensitive.
For the first time, Zera has announced prices for 15 cities with each city having a different fuel price tag.

The prices, ranging from $10,01 to $10,56 for petrol and $10,32 to $10,86 for diesel will push up prices of basic goods in these centres as the increase will be passed on to consumers. While Zera is justified to adjust the prices considering the distance from the Harare depot, the margins of $0,50 for petrol and $0,85 for diesel are unjustifiable.

Fuel has always been marginally cheaper in Harare compared to other cities but the problem is that it has been officialised at a higher margin.  The regulatory authority must adjust its costs, because these towns and cities will become the most expensive in the country.   

The most expensive will be Victoria Falls at $10,56 for petrol and $10,86 for diesel and Hwange, which will sell petrol at $10,52 and diesel at $10,82, while Beitbridge and Plumtree will sell petrol at $10,43 and diesel at $10,74. Consumers of petrol in Chinhoyi will now be paying $10,14 per litre of petrol, while diesel will retail at $10,44.

While the cheapest prices are in Harare and Mutare at $10,01 for petrol and $10,32 for diesel, in Bulawayo and Chiredzi, motorists will buy petrol at $10,39 and diesel at $10,69.

The pricing appears discriminatory for some as it is based on geographical location. There is also a danger the new system will distort the social fabric of the country by insinuating that some places are different from others.

Others are of the feeling that the zonal pricing will leave marginalised societies - which are far from the centralised economic hub - more impoverished.  The other alternative is to allow towns and cities in South West of Zimbabwe to import their own fuel via South Africa or Botswana instead of Beira.

This entails dismantling the distribution monopoly of fuel in the country so that petroleum companies can import from the nearest source. Those in Beitbridge, Plumtree, Hwange and Victoria Falls can easily access fuels from South Africa or Botswana, hence remain viable.

Government must cushion consumers by subsidising on the additional distribution costs or by reducing fuel taxes for those in the most affected regions so that prices remain level.



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