TINASHE MAKICHI
Prices of basic commodities have shot up significantly over the last few months as retailers respond to rising cost of fuel and utilities prices.
A survey by Business Times shows that prices of goods have been rising in both US$ and ZWL$ terms since January this year.
This means the unabated rise in prices of basic commodities would further erode the consumers’ purchasing power. A family of five now requires more than ZWL$24 000 a month, according to the Zimbabwe National Statistical Agency.
Last week, the spike in fuel prices triggered price increases of basic commodities.
At most fore courts, diesel is now selling at US$1.32 per litre from US$1.27 per litre.
In tandem, petrol has gone up to US$1.30 per litre from US$1.26.
In local currency terms diesel went up to ZWL$110.41 per litre from ZWL$ 105.58 while petrol went up to ZWL$109.17 per litre from ZWL$104.82.
An increase in fuel has a devastating impact on other goods.
Consequently, the price surge has triggered a wave of price increases for basic commodities.
For instance, commercial beef is now selling at US$4.85 per kg from US$4.25 per kg. Special beef has gone up to around US$6 from around US$4.85. In Zimbabwe dollars it’s selling at about ZWL$600 per kg.
Another notable increase was recorded in cooking oil. A two-litre bottle of cooking oil, which was selling at around ZWL$254 has gone up sharply to ZWL$340, while a 2kg packet of rice now retails at ZWL$241 from ZWL$202.
The price of sugar has also gone up from about ZWL$180 per 2kg to ZWL$ 229. A 10kg of mealie-meal is now selling at over ZWL$600, from ZWL$469.
Confederation of Zimbabwe industries president Henry Ruzvidzo contends the spike in prices were triggered by the upwards adjustment of prices of fuel, electricity and the appreciation of the South African Rand against the USD. The South rand is currently trading at 15.2% against the USD.
“Mostly appreciation of the rand against the USD and the adjustment in cost of electricity, rates, and fuel has also shifted the cost base in real terms,” Ruzvidzo said.
The Confederation of Zimbabwe Retailers (CZR) said the cost drivers have gone up thereby increasing the cost of doing business.
The spike in cost drivers, he said, has forced retailers with no option but to pass on the costs to the hard-pressed consumers.
“All cost drivers have gone up lately including fuel and business is simply passing on the costs through final pricing to the consumer,” CZR president Mutashu said.
Treasury secretary George Guvamatanga recently said that the government was unhappy with the surge in prices saying market indiscipline was resulting in huge margins effected by producers, retailers and importers.
He warned that the government would be forced to intervene to address the market failures, raising fears of rolling back price controls which resulted in empty shelves.
