THE Consumer Council of Zimbabwe (CCZ) expects prices of
basic commodities and services to skyrocket following the near 50% increase in
fuel prices last Tuesday.
“In the costing models that have been done in the past,
fuel has always caused an increase though not major, but depending on what type
of business you are running it has a cost build-up in the cost structures,” CCZ
chairman Philip Bvumbe told Standardbusiness.
Last week, the Reserve Bank of Zimbabwe cancelled fuel
subsidies and instructed oil operators to source their foreign currency from
the interbank market.
This resulted in a near 34% jump in the forex rates on the
interbank market and later a 50% increase in the price of fuel.
As such, the pump price per litre of diesel and petrol sold
rose nearly 51,9% to RTGS$4,89 and 48% to RTGS$4,97, respectively, compared to
last Monday
prices.
In a snap survey to gauge the cost of basic commodities
conducted by Standardbusiness, prices of selected goods were now significantly
higher than what they were in the first week of the month.
At TM Pick N Pay, OK Zimbabwe and Spar Zimbabwe stores in
Harare’s central business district, prices of margarine had gone up by 36,93%
to an average of
RTGS$8,75; 8% to RTGS$5,28 for 2kg of brown sugar and
115,2% to RTGS$2,69 for a 125 gram packet of tea leaves.
Cooking oil was up 7,41% to an average of RTGS$14,49;
17,12% to RTGS$7,32 for a 2kg pack of rice, 161,08% to RTGS$4,83 for a kg of
tomatoes, 262,7% to RTGS$6,71 per kg of onions, and 10,05% to RTGS$2,19 for
bathing soap.
There were also increases in the prices of washing powder of
10% to an average of RTGS$14,66 per kg and 12% to RTGS$3,64 for a bar of
laundry soap.
“It is tight. Most families are now living on one meal a
day, even less than one meal a day.
“When you look at the austerity measures that were put in
place, are there social safety nets for the ordinary person, for the poor
person who is suffering on the road?” Bvumbe asked.
“There are no social safety nets that were put in place to
ensure that basic commodities are then affordable to the ordinary person.
“The government needs to put social safety nets to ensure
those who are not even affording a meal a day can get something to eat, which
is a basic human rights issue.”
According to industry insiders, manufacturers are currently
in the process of including the near 50% increase in fuel in their costing
structures, which will result in further price increases.
“It is normal that they do that, rational actually. It
differs from manufacturer to manufacturer because some do not have wider
networks of distribution of the product so in those cases there are fewer costs
in transport.
“But, those who have large distribution networks like those
in the baking industry have a higher transport cost,” the industry insider, who
asked to remain anonymous, said.
“For retailers, they have already implemented the fuel cost
into their pricing.”
Labour and Economic Development Research Institute of
Zimbabwe director Godfrey Kanyenze said his organisation was working on a paper
to analyse the impact
of the fuel price increases.
“Fuel increases cascade to the rest of the economy because
of the linkages,” he said.
“Even government itself has admitted, like I think Finance
permanent secretary ministry, George Guvamatanga indicated that they were now
using the social
protection framework through the reduction in the fuel
duty.”
Kanyeze, however, warned that the government intervention
did not go far to protect consumers against price increases.
“It is already clear that the consumer is the biggest loser
because already inflation is going up and the consumer has already lost,” he
said.
“Income is lagging behind price adjustments and it is
already clear also that this (fuel price increase) is going to exacerbate an
already difficult situation for the consumer.”
Apart from the prices of basic commodities increasing,
transport fares had also increased.
According to the Greater Harare Association of Commuter
Omnibus Operators (Ghacoo), transport fares are pegged at RTGS$2,50 per 10km
travelled, RTGS$3 per 20km and RTGS$3,50 for 30km.
However, Ghacoo secretary-eneral Ngoni Katsvairo said the
fares were too low as they could not break even.
He said they needed to charge RTGS$3,20 per 10km, RTGS$5,50
per 20km and RTGS$8 per 30km for them to remain viable.
“The increase in fares is basically informed by the 50%
increase in fuel prices, which happened recently, and also the rates that are
going up in terms of foreign currency,” Katsvairo said.
“We buy all our spares using United States dollars as there
is no shop that is taking bond notes.”
Katsvairo said fuel costs represented 30% of their expenses
and spare parts took 40%. Standard
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