Industrialists say rising fuel prices push up the cost of production and this will result in a sharp increase in the prices of goods and services.
Early this week, the Zimbabwe Energy Regulatory Authority (ZERA) increased the price of petrol to US$1.73 per litre from US$1.68 while the retail price of diesel also went up to US$1.76 from US$1.74 a litre.
Confederation of Zimbabwe Industries (CZI) president, Kurai Matsheza, told Business Times that rising fuel costs threaten the survival of the manufacturing sector. Said Matsheza:
As industry, we cannot absorb these cost increases but we can pass them on to customers and the net effect of that is that production is going to come down because there is no way businesses are going to continue producing the same products at the same volumes with these cost increases.
With the new development in the economy the cost of production for all goods is going to go up, leaving the manufacturing sector exposed to these challenges that threaten the survival of the sector.
Unfortunately, this is the difficult operating environment the economy is living in daily.