Fuel price up 15%

By The Standard | Apr. 6, 2020 | 2 Min read

GOVERNMENT has hiked fuel prices by 15% following a shift in the exchange rate and an increase in excise duty.

BY FIDELITY MHLANGA

This is happening at a time international oil prices have tumbled as a result of the coronavirus pandemic.

Local petrol price went up from $18,28 to $21,77 and diesel rose from $18,66 to $21,52 according to new prices announced by the Zimbabwe Energy Regulatory Authority (Zera) at the weekend.

Zera acting chief executive officer Addington Mazambani told NewsDay Business that the hike was prompted by the increase in fuel duty as well as shift in the exchange rate.

“The main drivers for our fuel price increase are exchange rate increase from $18 to $25 and increase in duty from $4,26 to $5,82 for diesel and from $4,44 to $7,28 for blend,” he said .

The global oil prices have fallen by 30% since January this year as the demand for oil plunged following the outbreak of coronavirus.

Malawi and South Africa have reduced fuel prices to cushion their citizens, who are reeling from the effects of COVID-19. Local economist Victor Bhoroma said the move by authorities to increase fuel prices was motivated by the need to increase tax gains.

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“The Zimbabwe government is all about maximising tax revenues. They are clearing the base for US dollar taxing,” he said.

Authorities recently gave petroleum companies with free funds a greenlight to sell fuel in hard currency.

Motorists who spoke to NewsDay Business expressed concern over the fuel hike, saying it was ill-advised.

“I think increasing fuel prices is a shame when the price of crude oil has dropped. These guys seem to live in planet Mars. They don’t acknowledge reality. In other countries like Malawi, prices of fuel have gone down. In the end, our government should look into the ways of establishing a permanent solution to this crisis,” a motorist identified as Peter said.