THE recent increase in the prices of fuel has triggered a massive hike in the prices of most basic commodities.
The Zimbabwe Energy Regulatory Authority on Wednesday
increased fuel prices for the second time in five days, with petrol going up
from US$1,51 per litre to US$1,67 and diesel from US$1,51 per litre to US$1,68.
Confederation of Zimbabwe Retailers president Denford
Mutashu implored government to focus on internal alternatives through sourcing
and production to curtail the negative economic reflex effect triggered by the
Russo-Ukraine war.
“We should brace for price increases on basic and
non-essential products as the global geopolitics play out triggered by the Russia-Ukraine
war. It is high time we focus on internal alternatives through domestic
sourcing and production. Prices of fuel and gas are set to remain unstable for
the unforeseeable future although there is relief from the intervention of the
Arab world that has committed to increase production and supply of crude oil.”
This came as Grain Millers Association of Zimbabwe (GMAZ)
chairperson Tafadzwa Musarara announced increases in bread and mealie-meal
prices in response to increases in the prices of maize and flour.
Musarara said the price of maize increased from $43 000 to
$50 000 per metric tonne, while the flour price also went up by 14,74% to $136
544 per metric tonne.
“The maize meal retail price for 10kg roller meal will
increase by 15% from $955 to $1 099.
“Bread flour will move up by 14,74% from $119 000 to $136
544 per metric tonne,” Musarara said.
He said the surge in fuel prices had impacted their
operating costs.
Musarara said the wheat landing price had surged from
US$475 to US$675.
“The upward trend was anticipated to continue on the back
of the disturbances in east Europe. Wheat constitutes 30% to 42% of the cost of
bread.
“The government-sponsored wheat farming programmes have
recorded the highest yield since the commencement of wheat farming in Zimbabwe.
However, the war in Ukraine has greatly affected dynamics, leading to the price
increases,” Musarara said.
The country is currently consuming 16 000 metric tonnes of
bread flour monthly, and approximately 1,2 million loaves a day.
Demand for bread is expected to increase as aggregate
demand improves, owing to the removal of COVID-19-induced lockdowns.
“The 2021 local winter wheat harvest saved the country
US$146 million. This proves to be a profitable import substitution transaction.
However, the country will need to import 155 000 metric tonnes of wheat to
mitigate the variance between local production and national demand,” he said.
Confederation of Zimbabwe Industries president Kurai
Matsheza said the increase in food prices was a serious cause for concern.
“This is not good for our economy. Fuel touches every
sector, therefore, there will be inflation because of these exogenous factors
coming so early in the year. The forecast year end numbers (inflation, gross
domestic product (GDP) growth) are almost certain to be missed. The increase in
fuel prices will trigger a cycle of price increases across all products and
services. The disinflation we were experiencing will certainly be reversed.
Food price increases are a worry for all. Wage demands will intensify and
poverty levels will increase. 2022 looks certain to be bad for all of us.”
Former finance minister Tendai Biti said: “The price hikes will have a drastic impact
on consumers and will erode their finances.” Newsday
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