SENIOR STAFF WRITER
ECONOMISTS are predicting a slight increase in the price of basic goods after the Zimbabwe Energy Regulatory Authority (Zera) yesterday announced an eight percent increase in fuel prices.
The increase attributed to supply disruptions caused by Covid-19 travel restrictions, now sees petrol costing US$1,26 from US$1,21 while diesel is now at US$1,27 from US$1,23.
As for the local currency, diesel is now at $106 up from $101 while petrol is now at $105 from $99.
Fuel price increases have a domino effect on the cost of most goods and services as the product is the driving force behind industry and production.
Economist, Godfrey Kanyenze, told the Daily News that the price increase in fuel would likely drive up the cost of production given power outages in the country owing to technical faults at Hwange Power Plant as announced by Zesa Holdings a fortnight ago.
“Any price increase at this point in time is very problematic. Fuel increase has come at a time when most workers are losing jobs owing to Covid-19.
“A fuel hike will obviously trigger an increase in other commodities and this will create challenges for the working people and general populace.
“It’s very unfortunate in terms of timing. That’s where dialogue becomes critical especially in these times of Covid-19 and come up with a win-win situation. Dialogue will enable the country to come up with sustainable policies,” Kanyeze said.
In the same vein, National Consumer Rights Association’s Efi Ncube attributed the hike of fuel prices to the supply chain being disrupted by the coronavirus lockdown.
“There are disturbances in Mozambique as well as Covid-19 regulations delays in Mozambique. This could also upset the supply chain to cause increases in the fuel sector.
As for the impact of fuel hikes to the local market, Ncube said any time when fuel goes up, it may immediately drive up prices or impact on prices later on during the supply chain.
“We are likely to see the prices of basic goods and commodities also going up due to the increases in the cost of production,” Ncube said.
Retailers Association of Zimbabwe president, Denford Mutashu said fuel prices increase and supply disruptions, road blocks, delay in procurement of raw materials and the gap between demand and supply would contribute to spiralling of prices.
“The increase in fuel price would most likely impact negatively on the prices of goods and commodities. The increase can be attributed to the global fuel industry price changes,” he said.