Finance and Economic Development Minister, Mthuli Ncube, said that initially he was opposed to ZESA increasing electricity tariffs, but he is now convinced that charges should be raised.
Ncube was speaking at an Alpha Media Holdings event dubbed In Conversation with Trevor. Said Ncube:
The power situation is very serious. In the short-term, we need to work on demand management strategies, where we categorise users and come up with a differentiated tariff system.
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For instance, there is no reason why the mining sector should not pay a tariff linked to the exchange rate because they are major earners of foreign currency.
So, we have to look at the demand side, the supply and internal operations of Zesa. In the past, I was unhappy about an instant tariff increase, but having done all these things, I am more convinced now we can now increase the tariff.
If we are only having power during the night when we don’t need it, then it really doesn’t matter if the tariff goes up.
In terms of how much, I can’t say, but those simulations are being done and soon, we will have a new tariff.
Ncube also revealed that the price of fuel will also go up to a price close to or equivalent to the US$1. He added:
The price of fuel is likely to go up, I think what will be ideal is the price of fuel is close to or equivalent to a US$1. That’s the ideal. If you look around the region, that’s the ideal.
So we will also get there, but we won’t get there in a big bang, it has to be gradual, not a big bang as long as we hold the exchange rate.
You will see the fuel price adjust to equilibrium one dollar. The reason for this subsidy to the economy is you are most aware that the arbitrage opportunities, that were there before, have crumbled.
Fuel is currently selling at ZW$5,26 per litre for petrol, and likely to rise to around ZW$9 a litre in line with the interbank market rate, where the United States dollar is trading at 1:8,5 against the local currency.