FUEL prices have gone down by at least US10 cents per litre, with dealers in the petroleum industry attributing the slump to political stability in the Middle East and a fall in crude oil prices on the international market.
Prices of unleaded petrol plummeted by an average US9 cents, while diesel has gone down by at least US13 cents. Unleaded petrol, which has been selling at between US$1,45 and US$1,50 is now costing between US$1,36 and US$1,42. Diesel has been going for US$1,35 at most filling stations and is now selling at between US$1,23 and US$1,27.
It is understood that as of yesterday, the price of a barrel of crude oil hit a world record slump of US$88 in three years. Sources in the petroleum industry said since the beginning of the so-called Arab Spring, prices of oil fluctuated to about US$120 a barrel.
It is argued that although there are some problems in Syria, there is stability in most parts of the Middle East that has contributed to the reduction of fuel prices. A fuel supplier who refused to be named said there was huge production of oil in the Middle East at the moment.
“Regardless of what is happening in Syria, there is stability in the Middle East and there is huge production taking place there. Every time when there is big production, prices are bound to fall,” said the supplier.
An official at one of the country’s leading fuel suppliers, Sakunda Holdings, said the price reductions were as a result of a number of international factors, including a huge stockpile of oil in the US and the European countries.
“You will note that generally our (Sakunda) prices dropped by about US6-7 cents in the last few weeks,” said Sakunda public relations manager Ms Sarah Manyengawana. “Our diesel is now selling around US$1,23, while E10 Bio Unleaded is around US$1,31, unleaded petrol is US$1,35.”
Ms Manyengawana said the general increase in US crude supplies rose by 2,9 million barrels in the past three weeks, which is the highest since July 1990 and has complemented the law of the market of supply and demand.
The Zimbabwe Energy Regulatory Authority recently claimed that 95 percent of the fuel was coming through the Feruka Pipeline, making it cheaper. Zera chief executive officer Engineer Gloria Magombo said it was cheaper to transport fuel using the Feruka Pipeline compared to road.
“Cost per litre is US6,85 cents for pipeline and US12 cents per litre for road. The pipeline figure includes storage for 30 days,” she said. “Using the road is more expensive, but the market forces will ensure that the dealer using the road will have reduced margins due to stiff competition.”
Some stakeholders in the fuel industry warned of a sharp increase of fuel prices in the next few weeks, saying sanctions imposed on Iran by the US would have negative effects on fuel prices.
“The oil market will soon be depressed following the imposition of sanctions on Iran by the US over the issue of nuclear power enrichment,” said a source. “Pirates are also posing a huge threat to the market as vessels are being forced to use longer routes from the Persian Gulf to Beira.”
