Fuel prices go up by 5 percent

By Blessing Bonga

FUEL prices have gone up by at least 5 percent over the past week due to what fuel dealers attributed to limited supplies from Beira. Zimbabwe imports the bulk of its fuel through the Feruka pipeline, linking Beira and Harare.

Fuel dealers said the bad weather in Beira has negatively impacted on efficient discharge of fuel, which has slowed down inflows.

A survey by Herald Business around Harare showed that petrol was being sold at between US1,51c and US1,55c up from an average of US1,46c a week ago, while diesel was selling at between US1,34c to US1,36c from an average of US$1,30c.

Some filling stations did not have fuel at all while a number of unusual queues could be seem at a few service stations , especially in the high-density suburbs.

“During the past two to three weeks, bad weather in Beira has caused delays in the transportation of fuel into the country and we don’t have enough reserves now,” said an executive with one fuel company.

“With such a scenario, where you have inadequate stock in circulation and prices go up, it becomes inevitable to unfortunately pass on the expense to the customer, failing which you would end up being unable to restock.”

He also blamed the recent increase to international trends where oil prices have gone up. The recent price increases have the potential to cause ripple effects on all sectors of the economy as fuel is the major factor of production in both industry and manufacturing, economists say.

Economic analyst Mr Witness Chinyama said he was worried over the effects fuel price increases usually have on the general prices of commodities since transportation is key in doing any kind of business.

“Transport is crucial in every business, as it is a key component,” he said. “Prices are therefore likely to increase marginally to cushion producers and service providers from making a loss.”

Fuel prices in South Africa also rose last week by R0,41 for petrol and R0,73 for diesel. The increase has been attributed to a number of factors, including rising tensions in the Middle East that saw US WTI crude oil and Brent crude oil rising last week.

South African exports are performing poorly, leading to the ultimate weakening of the rand exchange rate against major currencies. This has been cited as another cause for the price increase in South Africa. The Herald