HARARE, Dec 20 — The Zimbabwe Energy Regulatory Authority (ZERA) on Friday said local prices of fuel may drop significantly in January next year in response to falling international prices of crude oil as suppliers will be selling new stock.

Wholesale fuel prices have fallen on the global market by a quarter and motorists in other countries have benefited from the reductions but Zimbabweans have been left out.

Some local fuel retailers have however reduced prices on average between 3 cents and 5 cents.

ZERA chief executive officer Gloria Magombo told a media breakfast meeting that local fuel prices will continue going down on the back of depressed global prices with diesel expected to hit below $1.28 per litre in January next year.

Magombo said prices of fuel differed from country to country with some having centralized procurement to enable price controls.

“In Zimbabwe, the market is an open structure and suppliers are sourcing from different sources thus costs structures are different,” she said, adding that it was difficult for ZERA to set a price cap.

She said local fuel prices should also react to international prices.

“In our case, fixed costs are at 50 percent and they are not the ones which are going down. These include taxes, levies and other regulatory costs,” she said.

Magombo said there was no quick fix to power deficit in the country and the SADC region.

She said though the region had not invested in capacity in the last 20 years, Zimbabwe has power projects which will be commissioned around 2017 and 2018.

Projects for various independent power producers were at different stages of development, she said.

She said the 500 megawatts Lusulu project had secured funding from the Development Bank of South Africa (DBSA) while the 1 200 MW Sengwa project was currently negotiating with potential funders.

Magombo said the independent power projects which were currently at various stages of implementation had a total output of 3 774 33 MW at completion.

Zimbabwe is suffering a huge power deficit due to low generation which stands at 1 200 MW against demand of 2 200 MW.

Unreliability of power has badly affected the economy, and constrained recovery.

In addition to the two power projects, the government has also lined up several others, including the Batoka Gorge scheme.

It has also broken up the monopoly of the Zimbabwe Electricity Supply Authority, and licensed independent power producers.

SOURCE: New Ziana