Africa-Press – Zimbabwe. Energy and Power Development Minister July Moyo has said the government plans to buy fuel directly for its own use and for key industries. This will help lower fuel costs and make businesses more competitive.
Speaking at the National Competitiveness Commission (NCC) inaugural competitiveness summit in Bulawayo on Wednesday, Moyo said that fuel prices in Zimbabwe are influenced by factors like the cost of raw fuel, transportation, exchange rates, taxes, and distributor fees. The Zimbabwe Energy Regulatory Authority (ZERA) considers all these when setting the price.
He also said Zimbabwe’s fuel prices are much higher than in neighbouring countries, making local products more expensive and less competitive.
Moyo said the government wants to provide more affordable and stable fuel prices to help businesses run more efficiently. He said:
We analyse and say, are we as competitive as Zimbabwe among those who we trade with? When we look at ourselves here in the region, I think we are very expensive.
So, the Government is looking at all this, and as I said, we applaud those who are delivering fuel to our country.
But as Government, we have made some strides now…both the Minister of Finance (Professor Mthuli Ncube) and I have been directed to make sure that we buy fuel for Government use and for other enablers of the economy because Government is there to enable the economy… to do well.
We have been directed to make sure that on the Government side and in any way, we should buy our fuel competitively because we used to do that so that we don’t buy spot purchases on the international market, as the other 10 (traders) are doing.
The other 10, we think they are doing very well, but as Government.. to compete, we should discuss with them.
Moyo said that countries like Mozambique, Zambia, and Tanzania have developed successful models where fuel traders work with their governments to achieve competitive pricing.
He explained that, unlike these countries, Zimbabwe’s current approach focuses on direct government procurement of fuel to reduce costs. Said Moyo (via The Herald):
Mozambique has fuel traders, Zambia has fuel traders, and Tanzania has fuel traders, but working with the Government, they have found a way of buying competitively.
But for now, we want the Government (to) directly buy competitively, so that we can reduce the cost of fuel in the country, which impacts on your competitiveness.
The Zimbabwe Energy Regulatory Authority (ZERA) has set the maximum fuel prices for February at US$1.58 (or ZiG 41.58) per litre for diesel, and US$1.53 (or ZiG 40.50) per litre for blended petrol (E15).
In comparison, Zambia’s Energy Regulation Board (ERB) has set the price of petrol at US$1.24 per litre and diesel at US$1.16 per litre for February.
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