Fuel scarcity persits – raises fears of price increases


    Some commuter omnibus operators are reportedly mulling fare increases from the current US$0.50 for most of the routes to US$1.

    An increase in fares would definitely be a shock and reversal to the minimal gains which have been realized since the introduction of multiple currencies in February this year.

    While players in the fuel sector have been citing the sharp rise in the price of crude oil for the increase, sources said there were some deep rooted problems which needed to be addressed.

    At one service station an operator told our reporter that the price increases were triggered by the international crude oil prices as well as local factors.

    “It may not be proper to give you some of the confidential information in the industry but the truth is we have to raise the price of fuel if we are to remain viable.

    It is true to say locally fuel is now very high, higher than say South Africa where a litre should be lower than R9 at most service stations but they do not have the same policies and the general operating environment as the one prevailing in the country.

    Most of us were happy that the sector is on a recovery path, with the commodity readily available but this is being reversed. It may not be long before those staying in border towns start importing the commodity for personal use as was the case last year. Government should come up with appropriate policies to cushion the sector as well as make sure it is viable,” said the operator.

    While he was evasive on the actual problems, it has since emerged that service station operators are not happy with the narrow profit margins of as low as US$0.05 per litre.