Forex fuel prices tumble

By Staff reporter | 16 Jul 2020 at 18:33hrs
Fuel dealers allowed to charge in foreign currency are now competing on price, with most charging well below the legal maximums of US$1,28 a litre for petrol and US$1,09 for diesel.

While fuel is readily available on the US dollar market, most motorists do not have foreign currency and if desperate, have to source it on the black market.

This shortage of customers with foreign currency and the growing number of stations using directly-imported fuel has created a competitive market.

Service stations receiving fuel directly imported with free funds are allowed to sell in foreign currency, but are forbidden from diverting fuel they would have bought in local currency into their foreign currency pumps.

Audits are planned to ensure there is compliance.

The regulator, Zimbabwe Energy Regulatory Authority (ZERA), fixes maximum prices for petrol and diesel in both Zimbabwe dollars and US dollars, but has always stressed that service stations are at liberty to charge less.

With the perceived shortages of fuel procured in local currency, the price has remained the maximum when it is available, $71,62 a litre for petrol and $1,09 for diesel. However, a number of service stations charging in foreign currency are now selling diesel at between US0,80c and US0,94c a litre and a maximum of US$1,14c per litre for petrol although some still want the maximum prices.

More service stations are now procuring fuel on the free-funds market, but concerns have been raised that there are diversions.

ZERA acting chief executive officer, Mr Eddington Mazambani told The Herald yesterday that it was perfectly normal for service stations to sell at below the announced prices, adding that it depended on their competitive advantages.

"It is actually a good thing that operators charge lower prices as it shows that there is competition in the market. "The regulator sets the maximum fuel prices and operators are allowed to charge prices lower than the maximum depending on their trading advantages which may include discounts from suppliers," said Mr Mazambani.

Motorists are having to scramble for US dollars on the black market to stay on the road now shop around.

"We were always buying fuel at between US0,90c and US$1,05c for petrol and diesel at between US$0,80c and US0,95c, so it was quite a shock to some of us. It is my hope that the prices will continue to come down," said a Harare motorist, Mr Jackson Ngwenya.



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