Fuel prices rocket again

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Fuel prices rocket again

BY TATIRA ZWINOIRA
ZIMBABWE’S energy regulator yesterday announced its second fuel price hike within a week, as advisory firm, Inter Horizon Securities (IH) warned of a steeper inflationary charge induced by the Russia-Ukraine conflict.

IH said rocketing wheat and fuel prices on the international markets would exert pressure on domestic prices, with year-end inflation expected at 105% by some experts.

This would be against double digit figures projected by government.

Signals of a looming crisis emerged soon after last week’s fuel price adjustments.

Zimbabwean businesses responded by effecting massive price hikes, which have relegated already stressed consumers deeper into poverty.

The Zimbabwe Energy Regulatory Authority (Zera) announced a 10% hike in fuel prices on average where petrol will sell as US$1,67 per litre from US$1,44 per litre.

Zera increased the diesel price to US$1,68 per litre, from the US$1,51 announced in the first price adjustment last week.

There has been a wave of global oil price hikes since Russian forces tore through Ukraine on February 24 following weeks of military build-up.

Global Brent crude oil prices hit a 14-year high of US$139 per barrel on Monday, rising from about US$97 before the invasion, leading to the adjustments in Zimbabwe.

In an analysis of global developments, IH said effects of the war would extend to wheat prices, leading to bread price hikes.

“Russia accounts for 12% of the world’s oil production . . . local blend prices surged from US$1,44 in January this year to US$1,51 driven by the aforementioned global developments,” IH said.

“The country’s month-on-month inflation inched up from 5,34% registered in January 2022 to 7% in February driven by an uptick in the parallel rate premium which has fuelled increases in prices of goods and services,” IH said.

“The year-on-year inflation for the month of February 2022 stood at 66,1% versus a year-on-year inflation of 60,6% registered in January 2022.

Apart from experiencing inflationary pressures emanating from benchmarking or indexation of prices of goods and services to the parallel market exchange rates, the country has also been importing global inflation,” said IH.

Last week, the World Food Organisation raised fears that ongoing global disruptions would be felt across markets.

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