January 23, 2018 / 4:39 PM / a year ago

UPDATE 1-Zimbabwe orders cut to petrol and diesel pump prices

(Recasts with government order)

HARARE, Jan 23 (Reuters) - Zimbabwe on Tuesday ordered fuel retailers to reduce the price of petrol and diesel by up to 7.5 percent after a tax cut, the energy minister said.

The decision is part of a drive by the new government of President Emmerson Mnangagwa to hold down prices following a raft of increases in basic goods this month.

Fuel prices are politically sensitive ahead of an election expected within months as Mnangagwa tries to secure a first term in office after he was installed in November in the wake of the overthrow of President Robert Mugabe who ruled for 37 years.

Since 2014, retailers have set their prices using a formula agreed with the energy regulator that allowed dealers to make a profit of 0.06 cents a litre.

But Energy Minister Simon Moyo said the government had now set the price of petrol at $1.35 per litre, down from $1.41 while a litre of diesel will cost $1.23 versus $1.33 previously.

The government had earlier announced it was reducing the import duty on fuel by as much as 17 percent, the first time it has done so since Zimbabwe adopted the U.S. dollar in 2009.

“I expect and trust that this important decision by the government shall be implemented by all concerned parties. I therefore expect nothing less than immediate compliance,” Moyo said in a statement.

The Petroleum Marketers Association of Zimbabwe was not immediately available for comment.

Moyo, however, said fuel prices would not remain fixed but would float in tandem with international prices.

Motorists in landlocked Zimbabwe pay some of the highest fuel prices in the southern African region. (Reporting by MacDonald Dzirutwe; Editing by Matthew Mpoke Bigg)

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