New Zimbabwe.com

Government reduces excise duty on fuel, hopes prices come down

THE government has reduced excise duty on fuel with effect from this Tuesday.
In a statement, permanent secretary in the Finance and Economic Development Willard Manungo said the duty would be cut by about $0,7 per litre on the three commodities.
“The minister of Finance and Economic Development Hon PA Chinamasa, MP has in terms of section 225 of the Customs and Excise Act (Chapter 23:02) reduce excise duty on fuel with effect from 23 January 2018,” said Manungo.
He added, “The reduction in excise duty on petrol, diesel and paraffin is as follows: petrol $0, 45 per litre to $0, 385 per litre; diesel $0, 40 per litre to $0, 33 per litre and paraffin $0, 40 per litre to $0, 33per litre.”
Government hopes that prices of other products, which have been soaring, will come down as a result of the development.
“This reduction is excise duty will have the impact of reducing fuel prices. This will also have the effect of reducing the impact of fuel costs in the economy’s overall production cost structure across all sectors,” he said.
There has been public outcry and parliament debates over local fuel prices which have remained unresponsive to fluctuations on the world market.
Excise duty has been pushing the price of fuels up, making Zimbabwe one of the top four countries in the region with fuel priced high.
According to the Zimbabwe Energy Regulatory Authority, total duties and taxes stood at $0, 461 and $0, 622 per litre for petrol and diesel respectively.
Energy minister Simon Khaya Moyo told the parliament Energy Committee this Monday, before the announcement slashing the prices, that his ministry was seized with the matter.
He also promised to address the intermittent shortages the country has been experiencing.
“The country is facing a challenge of sporadic localised fuel supply shortages where some service stations may at, one time, lack one or both of the products – that is diesel and petrol,” Khaya Moyo said.
“We are monitoring the situation very closely and we believe the shortages emanate from high excise duty. The companies which are supposed to supply us are owed a lot of money in terms of foreign currency and I believe apply some screws sometimes deliberately in order to get their monies.
“The major matter in terms of that is our excise duty. We have no credit lines. We have sanctions and so forth, we could not survive so the ministry of Finance has to apply some excise duty. That made our prices madly high, but we are addressing that.”Advertisement

The minister also said government would be opening up the sector to allow more competition with a view to promote market forces to further plummet the price.