President Emmerson Mnangagwa has directed the Government to enforce domestic remedies, including a reduction of duty on petroleum products, to control the price of fuel which went up twice last week.
The Zimbabwe Energy Regulatory Authority (ZERA) attributed the surge in fuel prices to geopolitical factors caused by the Russia-Ukraine conflict.
Following the latest review, which left diesel and petrol selling at US$1.68 and US$1.67 per litre, respectively, fuel in Zimbabwe is the most expensive in the SADC region, a development that angered players in the energy sector.
Analysts say the surge could have a negative effect on the recovering economy.
The Sunday Mail quotes President Mnangagwa as calling for calm saying Government has taken measures to shield the economy from global disruptions. He said:
We are looking at the whole duty framework to cushion our economy from shocks and pressures from galloping fuel prices.
There is no need for panic. I have already directed the Ministry of Energy and Power Development to review and reduce duty and surcharges on fuel so the pump prices of petrol and diesel remain manageable.
We need stability in the fuel market so we minimise imported inflation for price stability in the economy. Cabinet will be seized with this issue in days and weeks ahead.
As of March last year, Zimbabwe’s total taxes and levies on diesel and petrol amounted to about US$0,30c per litre.
In an engagement with players in the insurance sector on Wednesday last week, Finance and Economic Development Minister Professor Mthuli Ncube said the Government was already in the process of reducing fuel taxes. He said:
It’s not easy to come up with risk mitigation measures, but one thing we have done is to lower the taxes on fuel from about 12,7 cents (US) to 8,7 cents (US), and that’s where we are now.
Prof Ncube said the Government is looking to reduce the taxes further.
More: The Sunday Mail