Government has with immediate effect slashed pump price for fuel following the recent reduction of excise duty, a move likely to result in a decline in prices of basic goods, as high production cost structures were being partly attributed to high fuel prices.
The price cut means petrol is now pegged at $1.35 per litre while diesel is now sold at $1.23 per litre with paraffin now sold at $1.17 per litre.
Excise duty on petrol was reduced by 6,5 cents per litre from 45 to 38,5 cents, while for diesel and paraffin, it declined from 40 to 33 cents.
Energy and Power Development Minister, Simon Khaya-Moyo told journalists in Harare on Tuesday that all players in the fuel sector should abide by the new prices.
“In relation to the allowable maximum pump prices that should be observed by all traders, this means that the fuel prices announced this week by the Zimbabwe Energy Regulatory Authority (ZERA) will come down,” said Khaya-Moyo.
He however said the fuel prices will not remain fixed as they can be affected by the commodity’s international pricing.
Fuel is one of the major costs incurred by business people and has a direct effect on prices of commodities.
The Zimbabwe Energy Council last year noted that fuel in Zimbabwe was the most expensive in the region. Despite government’s mandatory blending policy that compelled fuel companies to mix unleaded petrol with ethanol, it remained higher than other countries in the region including South Africa, Botswana and Zambia.