Consumers should brace for basic commodity price increases

Local consumers should brace for an upward review in prices of goods following the latest adjustments on fuel prices by the Zimbabwe Energy Regulatory Authority (ZERA).

By Tongai Mwenje and Crucial Kuwanga

ZERA on Friday, December 4, announced the new increased fuel prices of fuel effective from Saturday 5 December 2020 after its last review a month ago.

In a statement, ZERA has increased diesel price by ZWL$9.39 from ZWL$82.05 to ZWL$97.24 and petrol has been pegged at ZWL$97.44 from the previous ZWL$97.11.

Whilst diesel has gone up by 19% in USD terms petrol remained unchanged.

Diesel now costs USD$1.19 from the previous USD$1 per litre while petrol has maintained its previous value of USD$1.19 per litre.

In a public statement issued by ZERA:

“Operators may however, sell at price below the cap depending on their trading advantages.”

The latest development is in response to the Minister of Finance and Development Professor Mthuli Ncube’s recent 2021 budget which proposed an array of taxes.

On the fuel sector, Ncube said fuel excise duty will be paid in foreign currency unless the importer provides satisfactory documentary evidence to the effect that funds were sourced through the auction system.

The Petroleum Importers’ Levy was pegged at USD$0.05 a litre on both diesel and petrol.

The latest increase in the fuel price will have a negative impact on already struggling consumers. For quite a while we were the victims of multiple price hikes.

As we all know, these changes in the fuel price, have an impact on the transport industries.

The companies that specialize in transporting goods from one large city to another, determines their prices in accordance with the current prices for fuel.

For this reason, the increase in the fuel price will have an effect on the customer of the transporting company, not directly the transporting company itself.

You might think all is well then, but that is not the case.

In order for transporting companies to remain in business while still making a profit, they will have to quote more each time that there is a dramatic increase in the fuel prices.

This is the part that will have an effect on the transporting company. Each time that the fuel prices go up and they also increase their prices.

Most local manufacturing companies use diesel to transport their goods and obviously they will pass on the costs to the consumers so that they remain in business.