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Fuel prices increased
Women's Institute for Leadership Development
March 14, 2013

Government has increased excise duty on fuel by 25% with effect from last Saturday. This is likely to push fuel prices up by at least five cents per litre.

Briefing the media in Harare, Finance Minister Tendai Biti said the increase would see all fuels going up with petrol excise duty surging to 30 cents per litre from 25 cents while diesel will be pegged at 25 cents from 20 cents per litre.

“Government seeks recourse from the ordinary tax payer; hence excise duty on diesel and petrol is being reviewed upwards for the period March-December 2013. This would translate to an increase of 20 % and 25% in excise duties on diesel and petrol respectively,” said Biti.

On the financial services sector, Minister Biti said financial institutions should comply with the recommendations agreed by the Reserve Bank of Zimbabwe and the Bankers Association of Zimbabwe.

“RBZ and BAZ signed a memorandum of understanding (MoU) which provides guidelines for determination of interest rate margins and bank charges. The MoU took effect on the 1st of February 2013.We hear a number of banks have complied though some are yet to comply but when there is gross indiscipline we are likely to transform to the agreement into a statutory instrument,” he added.

The increase in excise duty on fuel follows the trend set by South Africa.

While analysts believe the increase of duty on fuel will mean more revenue to government, it is also believed it will trigger price increases from across the value-chain.

Residents in Bulawayo have however expressed concern over the increase of fuel. They said this will make retailers to increase prices of basic commodities which are already expensive. “Shops increase prices when fuel is increased. Now if the government increases fuel prices they are making life unbearable for us who do not earn much.” Said Nombuso Ncube, a mother of four.

Other residents however viewed the increase by government as a move to fundraise for the upcoming elections. A source who preferred to remain anonymous said “this is a strategic move by government to fundraise for the elections. We have been reading in the papers that the government has to look for funds for the upcoming referendum and subsequent general election.” He said.

Finance Minister, Tendai Biti was quoted in Nehanda radio saying government increased excise duty on fuel because Zimbabwe had the cheapest prices in southern Africa. “It has also been unavoidable that government seeks recourse from the ordinary taxpayer.

Hon. Biti said although government has been able to raise funding for the immediate needs of the referendum to the tune of $31, 5 million, and allowances for polling agents are yet to be guaranteed.

The Zimbabwe Election Commission, the body in charge of electoral processes in the country, had requested $85 million for a referendum and an additional $132 million for a subsequent general election.

“As a ministry we consider the $85 million request from ZEC as being too much. A combination of measures to rationalise payment allowances, containing the period of activities and personnel requirements to the barest minimum will reduce next week’s referendum requirements to under $75 million,” said Biti.

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