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Zimbabwe Hikes Fuel Prices Amid Economic Crisis


Motorists wait to fill up their tanks at a fuel station in Harare. (AP)

The Zimbabwe Energy Regulatory Authority (ZERA) has increased prices of fuel by between 46 and 49 percent with immediate effect, a situation that may result in steep increases of prices of basic commodities.

In a statement, ZERA said the new prices are based on the interbank market rate set on Monday by the central bank with an intention of stopping galloping inflation fueled by the black money market.

The retail price of one liter of blend petrol (E10) is now RTGS$4.97 and diesel is selling at RTGS$4.89. Before the increases, blend petrol cost RTGS$3.36 and diesel RTGS$3.22.

ZESA said, “Operators may sell petroleum products at prices below the cap depending on their trading advantages.”

The current fuel price increase follows the 150 percent hikes in January, which resulted in public protests that led to the killing of several people by state security agents.

According to tradingeconomics.com, gasoline prices in Zimbabwe averaged US$1.64 per liter from 2017 until 2019, reaching an all-time high of US$3.39 per liter in March of 2019 and a record low of US$1.31 a liter in July, 2017.

Economists say the fuel hikes will result in steep increases of prices of basic commodities.

The central bank on Monday said foreign currency for purchasing fuel will now be secured using interbank foreign exchange market rates in an effort to promote its effective use and to curtail “incidents of arbitrage in the economy.”

Oil marketing companies were receiving foreign currency to import fuel from the RBZ at a special rate of 1:1 (US/RTGS).

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