THE price of a standard loaf of bread has risen by 6,8 percent to $94 and bakers have blamed the increase on the recent upward review of utility charges and the price of fuel.
A snap survey carried out by Business Chronicle indicated
that retailers in Bulawayo have increased the price of a standard loaf from $88
to $94.
Speaking by telephone National Bakers Association of
Zimbabwe (NBAZ) president Mr Dennis Wallah said production and distribution
costs have increased occasioned by the recent increase in utility charges and
fuel price.
“Its not a hidden fact that if you look at the price of
fuel it went up, so obviously distribution cost goes up. And also utilities have moved astronomically
high. Obviously all these factors result in the cost of products spiralling
upwards,” he said.
Of late, utility charges have risen significantly and in
some instances by margins above 300 percent in cases such as water bills.
In addition, since the beginning of the year, the price of
fuel has been increased twice with the Zimbabwe Energy Regulatory Authority
(Zera) attributing the upward review of fuel price to a general rise in prices
of fuel on the International market.
Early this month, Zera increased the price of diesel 50 in
local currency is $110,41 per litre from $105,56 while that of petrol (E10)
rose to $109,17 from $104,82.
In US dollars, the new price of diesel 50 was US$1,32 from
US$1,27 while petrol was pegged at US$1,30 from US$1,26.
Zera has indicated that between January and February this
year, there have been increases in the Free On Board (FOB) prices for petrol
and diesel and this has a knock-on effect on the pump of fuel.
The FOB refers to the costs of shipping the product and as
a net importer of fuel, any rise in the FOB results in price increases for the
product.
In a separate interview, the National Consumer Rights
Association spokesperson Mr Effie Ncube said from a consumer perspective there
is no justification in increasing the price of bread.
“From a consumer standpoint, there is absolutely no
justification whatsoever for the rise in the price of bread.
“Fuel and other utilities dominate the price of services
and goods downstream, but there is no justification to the mark-ups that they
did even taking that into account,” he said.
Mr Ncube said the business model that they presently have
should be such that it can absorb price hikes of fuel and other utilities without
necessarily passing them on immediately to consumers.
“They need to develop to a business model that allows them
as businesses to function and prosper without constantly rising prices like
what they are doing.
“They still have no justification for the mark-up rates
that they are putting in order to respond to changes in the supply chain,” he
said.
While the country had enjoyed notable price stability since
the introduction of the auction system in June last year, there have recently
been price increases across products. Chronicle
Retailers say the increase resulted from a number of
factors among them price increases by producers, arbitrage and opportunism by
few players allowed to open during the lockdown period.
Manufacturers, however, argue that businesses have been
responding to the general adjustments in various rates and fees across the
economy and the absorption of these costs reflected in price increases as the
costs are passed on to the consumer. Chronicle
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