HARARE, September 1 (The Source) – Zimbabwe’s energy regulator is reviewing the country’s fuel pricing model to benchmark it on regional standards amid concerns that petroleum products were grossly overpriced, a senior government official has said.
Fuel prices in Zimbabwe, which solely relies on imports, are determined through a government approved model which takes into account various cost elements with wholesalers and retailers alike restricted to pegging their prices at a margin of no more than seven percent.
Zimbabwe’s oil companies, however, are being accused of overpricing petroleum products and not responding to price changes on the international oil market.
International crude prices have been falling since last June from $90 per barrel to as low as $40 a barrel on Monday.
Energy secretary Pattison Mbiriri on Tuesday told journalists that there was need for the Zimbabwe regulatory Authority (Zera) to review the various cost elements with the aim of improving the pricing model.
“The current fuel cost build-up was developed during the period when the country had just dollarized. None of the parties that developed the cost build-up model had any experience in US dollar pricing,” Mbiriri said
“This is why at some point bread was selling at $2 a loaf”.
Mbiriri said the current cost build up might include costs that should have not been included or exclude costs that should have been included.
Petrol prices in Zimbabwe are ranging between $1,47 and $1,56 per litre while diesel is costing between $1,36 and $1,46 per litre.