Blaming fuel costs for bread price hike unjustified
Finance and Economic Development Minister Professor Mthuli Ncube said fuel prices could not be a factor since 30 million litres of fuel had been pushed into the market to help maintain a stable pricing of fuel in Zimbabwe despite continuous global hikes.
THE increase in the price of bread flour by millers, which will automatically trigger price rises for bread, is unjustified if it is based on increases in the price of fuel that has been kept almost totally stable in Zimbabwe, Government has said.
Millers this week announced the hike citing global fuel prices and, more importantly, an eight percent rise in the price of wheat from the GMB. The millers acknowledge that the increase in flour prices will trigger increases in bread prices.
The Government disagrees that fuel price rises can affect Zimbabwean flour prices since it has taken a lot of steps to stabilise the local price through flooding the market with fuel, reducing taxes on fuel as a price control measure and other initiatives.
In a statement, the Grain Millers Association of Zimbabwe (GMAZ) cited the upward review of the prices of fuel for triggering the price hike.
They also cited the interbank exchange rate which they say has moved up, and the increase of the local wheat price from the Grain Marketing Board to millers by eight percent.
“The aggregate impact of these movements will be around a 10 percent increase in the
price of flour to bakers.
“However, individual millers and bakers will continue to deliberate on prices, leveraging
on quantity discounts, payment terms and any other considerations,” said GMAZ.
Finance and Economic Development Minister Professor Mthuli Ncube said fuel prices
could not be a factor since 30 million litres of fuel had been pushed into the market to
help maintain a stable pricing of fuel in Zimbabwe despite continuous global hikes.
While the global economy since the last quarter of last year was impacting Zimbabwean
prices for most goods, this was not the case for fuel.
“The food sector itself is saying the fuel prices are impacting the prices of flour which is
a critical ingredient for making bread,” said Minister Ncube.
“We know that fuel prices generally have been on the up. I do not know why, on this
occasion they felt they had to increase the price of flour right now.
“The Government is doing everything to cap the sharp increase in fuel prices. First of all
we have been regulating the increase through the reduction of fuel levy.”
Meanwhile, from a quick survey in shops around Harare yesterday, the average prices of
bread were still maintained from last week so the consumers are yet to be affected by the
adjustment of bread flour prices.-The Herald
