By Tendai Sahondo
FINANCE and economic development minister Mthuli Ncube’s mid-term policy measures have heightened the suffering of hard pressed Zimbabweans as the prices of basic commodities have shot up beyond the reach of many.
Zimbabweans who had been expecting the review to provide some measure of relief were bitterly disappointed as the policy pronouncements made last week only added salt to wounds.
Triggering the escalation has been the unprecedented hike on fuel prices owing to the introduction of 45% and 40% excise duty per litre of petrol and diesel, respectively.
Presenting the review statement, Ncube said the hike was in response to inflationary pressure and recent currency adjustments. A litre of petrol is now going for $9.06 while that of diesel is going for $9.01.
Firms and organisations engaged in the direct importation of the scarce commodity were not spared as Ncube proposed an excise duty of US$0.45 and US$0.40 per litre of petrol and diesel, respectively.
Ncube said the Direct Fuel Imports Facility was necessary to minimise disruptions to the production cycle due to the fuel supply gaps.
The learned professor also hiked vehicle license and tollgate charges by 500%. License fees for light vehicles surged to $100 from $20 while toll fees for light vehicles rose to $10 from $2. Heavy vehicles will now be required to part with $25 at the tollgate from the previous $5.
Zimbabweans eager on obtaining a vehicle license for classes 3 and 4 will have to part with $100 from the previously charged $20, while charges to obtain a license for classes 1,2 and 5 were increased to $125 from $25
In addition to these developments, government also approved an electricity tariff increase, which Ncube said would help compound power shortages crippling the economy.
“In the short term, power supply deficit can only be met through power imports and hence it is urgent that Government capacitates ZESA to mobilise requisite resources through appropriate and cost recovery tariffs implemented through a differentiated scale. Therefore, Government has approved electricity tariff measures for immediate implementation,” he said.
The electricity tariff for Non-Exporting businesses was increased to an average of ZWL45c/kWh (approximately USc5/kWh) from ZWL9.86c/kWh
The electricity tariff for domestic consumers was increased to a subsidized average of ZWL27c/kWh (approximately USc3/kWh) from an average of ZWL9.86c/kWh. Meanwhile, the tariff for agriculture consumers was also increased by the same margins.
Government decided to maintain the tariff for ferrochrome smelters and other miners at US$0.067/kWh and US$0.0986/kWh, respectively, and ensure that the resources are ring-fenced in a Special account solely for purposes of importing electricity.
In addition to this, government gave ZESA the green light to bill all other exporters and foreign currency earners in foreign currency.