Friday, May 20, 2022

Fuel prices increases affect basic commodities prices‏

AN increase in fuel prices, blamed on the scarcity of the precious liquid in Zimbabwe, has pushed up the cost of basic commodities, piling more problems to long suffering Zimbabweans.

Zimbabwe has been hit by fuel shortages blamed on the failure of the state fuel procurement company to meet the nation fuel requirements.

The state run National Oil Company of Zimbabwe (NOCZIM) does not have sufficient foreign currency to import enough fuel, a situation that has seen the price of petrol and diesel going up to 14 and 15 rands from 10 and 9 rands, respectively.

Zimbabwe needs between 100 and 120 million litres of fuel a month, consuming about 1, 2 million litres of fuel a day. NOCZIM is currently importing 40 to 50 million litres.

Zimbabwe National Chamber of Commerce (ZNCC), an association which represents businesses in the country, justified the increases of basic commodities saying it is a move aimed at hedging against overheads caused by expensive fuel.

“The recent fuel increases has affected businesses,” said ZNCC president, Obert Sibanda. “The increase in prices of basic commodities is in response to the increases in fuel prices. We use fuel to produce and to transport most basic commodity like bread,” Sibanda added.

Analysts have warned that an increase in basics and fuel is likely to result in a spike in inflation levels that have been going down since February when a unity government was formed.

Inflation, which last year topped 231 million percent, has fallen to below 4 percent with Finance Minister, Tendai Biti, on Thursday predicting that in December, inflation levels for the country will be below 6.4 percent while the economy is expected to grow to 3 percent.

Analysts said an increase in basic commodities will pile the pressure on the government and industries to increase pay for long suffering workers in a bid to cushion them.

A Consumer watchdog, the Consumer Council of Zimbabwe (CCZ), said monthly family basket has also as a result gone up to about US$500 from last month’s figure of below US$450.

“How do workers survive when most of them earn less than US$150,” said Comfort Muchekeza, the CCZ spokesperson. “Prices were going down but now they are going up again. The government has to intervene and protect suffering workers.”

The country’s Finance Minister, presenting his mid term fiscal policy statement on Thursday, said the government had extended the importation of basics duty free to December in a move aimed at holding the prices of basics from going up.

Zimbabwe’s industries are failing to produce enough basics for the local market for sell at low prices as their production levels stand at below 20%, a situation forcing most businesses to import basics to avert any shortages.

Meanwhile, Zimbabwe has been ranked 118th out 122 countries surveyed in the Global Enabling Trade Report published by the World Economic Forum (WEF) in Geneva. The ranking measures and analyzes institutions, policies, and services enabling trade in national economies around the world and scores points for factors such as market access, border administration, business environment, transport and communication

According to the report Zimbabwe, which is ranked 4th from bottom, scored 2.91 points overall of which the highest ranked country on the report, Singapore, scored 5.97 points.

Neighbouring countries such as South Africa, Zambia and Mozambique were ranked 80th, 94 and 61 respectively. Zimbabwe recently played host to the COMESA summit and has logged a bid to host the World Economic Forum next year.


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