The Zimbabwe Energy Regulatory Authority says retail prices of diesel and petrol fell by 3,27 percent and 3,62 percent respectively, between March and May this year, in tandem with global petroleum trends.
This comes as the regulator made assurances that despite the acute shortage of foreign currency needed to import critical imports such as fuel, there were sufficient arrangements to ensure its adequate supply.
Zimbabwe is a net importer and a fall in prices saves money for both individual motorists and the country, which is battling to conserve its little hard currency, but requires a lot of it to import the precious liquid.
According to statistics from Zera, Zimbabwe imported fuel, diesel and unleaded petrol, valued $333 million between January and April 2017.
Diesel imports amounted to $208 million and petrol $125 million.
Zimbabwe imported fuel worth $600 million in the first half of 2016 compared to $628 million over the same period in 2015.
The country has 1,2 million vehicles consume about 1,5 billion litres of diesel and petrol per year.
Zera chief executive Engineer Gloria Magombo said since October 2016, oil producers have been trying to curtail production to boost prices, but the measures have not worked, benefiting net oil importers like Zimbabwe.
“Petroleum prices have generally been declining between March 2017 and May 2017. FOB prices for diesel declined by 4,4 cents per litre and petrol declined by 4,3c per litre during the same period to May 2017.
“Fuel price fluctuations occur as a result of global price movements, which rise and fall predominantly based on the laws of supply and demand at international stage. If there is a glut in supply, prices dip and the opposite applies when there is limited crude oil,” Eng Magombo said.
In order to reduce the amount of foreign currency the country loses through imports, Government came up with a policy that compels fuel retailers to blend unleaded petrol with ethanol prior to selling to motorists.
ZERA said local blending of ethanol assists in partial import substitution, which “would ordinarily result in more foreign currency leaving the country. The substitution then results in Zimbabwe saving foreign currency.”
Eng Magombo said the Reserve Bank of Zimbabwe had assured fuel importers of guaranteed supply of foreign currency to ensure that the country was energy secure.
“The country is safe from any possible short to medium term shortages due to a number of measures which have been set up by the Ministry of Energy and Power Development in conjunction with the Ministry of Finance and Economic Development,” Eng Magombo said. The Chronicle