BY TAURAI MANGUDHLA
MASSIVE price shocks loom across all sectors of the economy after government increased fuel prices for the second time in a month, this time by 1,7% for petrol and 3,4% for diesel in a move likely to drive inflation.
On December 5 last year, the Zimbabwe Energy Regulatory Authority (Zera) increased the price of diesel marginally to $97,24 and US$1,19 per litre and petrol to $97,44 and US$1,19 per litre.
Under the new price structure, which became effective yesterday, diesel is to be sold at a maximum of US$1,23 or $100,91 per litre while blended petrol is to be sold at US$1,21 or $99,35 per litre.
“Operators may, however, sell at prices below the cap depending on their trading advantages,” Zera said in a statement.
The move is expected to push up operational costs for manufacturers, miners and transport operators and have a ripple effect on other goods and services across the economy.
Miners and manufacturers have largely depended on diesel-powered generators as an alternative to electricity due to the recurrent power cuts.
The fuel price hike also comes as queues for the cheaper fuel sold in local currency are increasing each day, with most fuel stations running out of stock due to growing disparities between the official interbank rate and parallel market rates.
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This has been at the core of a fuel pricing conundrum.
Before shutting down for the holidays, the official interbank rate stood at just under $82 while the parallel market rates, which averaged $110, had already breached the $120 mark.
At $97,24 for instance, petrol is being sold at US$0,81 per litre, giving unscrupulous dealers who hoard and resale fuel for hard cash at about US$1,12 per litre, making a profit of about US$0,31 per litre of petrol sold.
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