HomeBusinessFuel prices up 33%

Fuel prices up 33%



GOVERNMENT has hiked fuel prices by 33% following a foreign exchange auction shift this Tuesday.In a circular yesterday, Zimbabwe Energy Regulatory Authority (Zera) announced that a litre of diesel now costs $83,36 or US $1,09 per litre. Petrol now trades at $93,15 or US$1,28.

In June, government hiked the price of diesel from $24,90 to $62,77. Petrol price per litre was increased to $71,62 from $28,90.

The new prices were announced a few hours after forex auction which pegged the Zimbabwe dollar exchange rate to the United States dollar at US$1: $80.

Since Zera granted fuel dealers permission to trade in US dollars, they have preferred to sell fuel in hard currency than the inflation-ravaged Zimdollar, but the majority of motorists who mostly get paid in the local unit are enduring a torrid time to access the fuel charged in Zimbabwe dollars.

This has forced them to sleep in queues battling to access the precious liquid as few dealers prefer to sell in domestic currency.

The local unit has been tumbling since its promulgation in June last year, and is currently trading with the greenback at US$1:$110 on the parallel market.

Inflation has decimated incomes and pensions with the official figure standing at 737% as of June.

In their financial reports, listed companies have continuously bemoaned the crippling effects of fuel crisis in their operations which has increasingly become an albatross to the ease of doing business in Zimbabwe.

Fuel prices have been going up regularly over the past six months, but this is the biggest increase since January 2019, when a round of increases sparked protests which resulted in the death of more than a dozen citizens and scores being arrested.

Zimbabwe’s fuel is now the most expensive in the region in US dollar terms, amid grave concerns over the cost effect of locally-produced ethanol on the overall petrol price.

It is the ethanol costs of US$1,10 per litre that has sent tongues wagging, with market watchers saying it was cost-effective to use unblended petrol than to use expensive E20 petrol.

E20 contains 20% ethanol and 80% petrol. Questions have been raised as to why ethanol, which is produced in Chisumbanje by tycoon Billy Rautenbauch, who is enjoying monopoly through his Green Fuel company, has added the huge cost to the price of petrol.

At a time when international oil prices are dropping due to the effects of COVID-19, Zimbabwean authorities have rode against the tide to hike fuel prices.

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