Bill Watch 02 - 2019 Fixing of Fuel Prices

BILL WATCH 2/2019

[20th January  2019]

Fixing of Fuel Prices

On the same day that the President announced new fuel prices (the 12th January) the Minister of Energy and Power Development published a statutory instrument (the Petroleum (Petroleum Products Pricing) Regulations, 2019 – SI 10 of 2019) setting out a formula by which fuel prices will be fixed.  The SI is on the Veritas website [link].

Veritas would normally try to explain the contents of such an important instrument, but in this case we are baffled.  It is virtually incomprehensible.  The main point of the instrument, we gather, is that the Zimbabwe Energy Regulatory Authority [ZERA] will have to publish weekly, in the Gazette or in a national newspaper or on its website, the maximum wholesale and retail fuel prices for the following week.  Whether different prices will be prescribed for payment in US and bond dollars is not stated.

There are several points we should make:

The SI may be ultra vires the Petroleum Act under which it was made.  It was purportedly made by the Minister after consultation with ZERA, but section 54 of the Act states that ZERA, after consultation with the Minister, must prescribe the prices for petroleum products.  So it seems on the face of it that the instrument was made by the wrong person.

The SI does not mention the new fuel prices announced by the President on the 12th January - $3,31 per litre for petrol and $3,11 per litre for diesel. The President did not mention ZERA when announcing them.  Did ZERA fix the prices?  If not they are invalid.

So far as we know, ZERA has not published the new fuel prices in a national newspaper.  They have not been published in the Gazette.  They were however posted on the ZERA website some three days after the President announced them.

When the President announced the new prices he said that foreign missions and tourists would be able to buy fuel at designated garages for special prices – Real US $1,32 per litre for petrol and US $1,24 per litre for diesel fuel.  Neither the SI nor ZERA’s website mentions these special prices.  Why not? 

Are the special prices sustainable, in view of the fact that on the same day as the President’s announcement an SI under the Customs and Excise Act (SI 9 of 2019) raised duty on petrol to US $2,31 per litre and on diesel fuel to US $2,05 per litre?  The duty – which presumably has to be paid in real US dollars  –  exceeds the special prices announced by the President.

The confusion is made worse by the Sunday Mail reporting the President as having said “These prices are predicated on the ruling official exchange rate of 1:1 between the Bond Note and the United States dollar”.  This statement and the two-tier pricing announced are contradictory .

 

Urgent clarification, by the Minister or ZERA or both, is needed.

 

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