THE price of fuel could marginally rise today by one and two cents per litre for diesel and petrol respectively as the government introduces a levy to raise funds to finance the 820km Plumtree-Mutare Highway loan.
The government took a multimillion dollar loan to fund the rehabilitation of the highway.
South African company Group Five is undertaking the project. Part of the road is now complete.
Announcing the 2014 national budget, Finance minister Patrick Chinamasa proposed the levy indicating that it would come in to effect from today.
However, motorists could get a reprieve as Parliament is yet to pass the budget.
“The government entered into a loan agreement with the Development Bank of South Africa with a view to finance the Plumtree- Mutare Road.
“In order to raise funds to service the above loan, I propose an additional road levy of 2c/litre and 1c/litre for petrol and diesel respectively with effect from 1 January 2014,” Chinamasa said.
Late last year, the government through the Zimbabwe Energy Regulatory Authority (Zera) introduced mandatory blending of ethanol (E5) and unleaded petrol.
Zera said the mandatory blending was in terms of the Petroleum Regulations, Statutory Instrument (SI) 17 of 2013 and Petroleum Act (Chapter 13:22) and was following the licensing of Green Fuel (Pvt) Limited after the company recently complied with conditions set by the government indigenisation law.
Zera said the E5 fuel met international standards and was compactible with any petrol engine.
Zera fixed the starting wholesale price of the ethanol produced for mandatory blending at $0,95c per litre for the first ninety days.
The price was to be reviewed every three months and was expected to reduce the current retail price of petrol by three cents per litre.
The introduction of E5 is in line with global trends in the deployment of bio-fuels in countries such as India, Thailand, Latin America, the United States, Europe and Australia where the minimum ethanol blending levels are at least 5%.
The benefits of ethanol blending (E5) will include, among others, reduction in vehicle tail pipe emissions, improvement in the octane rating of fuel and energy security for the country.