Government has, in the wake of a Treasury decision to reduce excise duty on fuel, ordered all retailers of the precious liquid to cut pump prices.
Energy Minister, Simon Khaya Moyo, Tuesday, gave a 24-hour ultimatum to fuel dealers to reduce prices immediately by between 7 and 14 percent.
The excise duty reduction by Finance minister Patrick Chinamasa is part of a wider government plan to reduce industry production costs and ultimately attract new money as well as investment into an economy that has remained stagnant for nearly two decades.
Khaya Moyo told journalists at a press briefing that petrol must now retail at $1, 35 per litre, with diesel and paraffin prices set at $1, 23 and $1, 17 respectively.
“I expect and trust that this important decision by the government shall be implemented by all concerned parties. I, therefore, expect nothing less than immediate compliance,” said Khaya Moyo.
Chinamasa, a few days ago, announced a shock cut in excise duty on petrol from 45 cents down by 6, 5 cents per litre to 38, 5 cents, while importers of diesel and paraffin will now enjoy a reduction of 7 cents from 40 cents per litre to 33 cents per litre.
Petrol prices have floated between $1, 40 and $1, 56 per litre, with diesel hovering between $1, 30 and $1,33 per litre.
Khaya Moyo denied his order could herald the return of price controls while the Confederation of Zimbabwe Industries (CZI) has weighed in saying it expects prices to fall in line with the lower cost of fuel.
“The industry shall, therefore, incorporate this fuel price reduction into its pricing structures, which will result in the prices of some basic commodities falling by ranges of 1 percent to 5 percent,” CZI president, Sifelani Jabangwe, said early on Tuesday.
“The overall consumer price index is therefore inclined to fall further from the 1, 2 percent increment experienced over the 2016-17 period. Out of the 15 monitored basic commodities, prices of economy beef for example are expected to fall by an average of 10 percent to 20 percent.”
Zimbabwe relies solely on fuel imports and, over the years, has suffered intermittent shortages of petroleum products exacerbated by the economic tailspin blamed on an unstable political climate.