Fuel prices to go up

The Government yesterday through the Minister of Finance and Economic Development Honorable Professor Mthuli Ncube,proposed a 7centd raise on excise duty on petrol and diesel to curb foreigners taking advantage of the local currency disparities.

Minister of Finance, Professor Ncube yesterday, presenting an $8,16 billion said the arbitrage opportunity had partly contributed to the increase in fuel imports, which reached $1,3 billion in October.

Foreigners convert hard currency on the black market to get huge premiums and use part of the proceeds to buy fuel here, for which Government needs forex to import.

The move, which takes effect on December 1, will see duty on diesel and paraffin increasing by 7 cents per litre from 33 cents, while duty on petrol will go up by 6,5 cents from 38,5 cents.

The duty increase is also part of broader measures by the Government to enhance revenue collection, which also entails payment of luxury motor vehicle import duty in foreign currency

“The country’s fuel has become relatively cheaper compared to prices obtaining in the region. The increase in consumption is clearly unsustainable, considering that the available foreign currency reserves have to be shared among other critical priorities,” said Prof Ncube.

To redirect scarce foreign currency towards productive sectors, Prof Ncube announced a new policy position that requires payment of duty on luxury vehicles in foreign currency.