THE Zimbabwe Taxpayers Platform (Zitap) has called on the government to slash non-essential spending and adjust fuel taxes to cushion consumers from the steep fuel price hikes.
Last week, the government, through the Zimbabwe Energy Regulatory Authority (Zera), hiked fuel prices to US$2,17 per litre for petrol and US$2,05 for diesel, from US$1,77 and US$1,71, respectively, making Zimbabwe the second most expensive fuel market in the Sadc bloc after Malawi.
The government attributed the hike to global supply shocks linked to geopolitical tensions in the Middle East, particularly the conflict involving the United States/Israel and Iran.
However, while this war has rocked global commodity markets, most of the fuel cost buildup in determining the final pump price relates to taxes and levies.
With a growing backlash over the fuel price hikes, the government revealed this weekend that it has established a high-level inter-ministerial committee tocraft urgent measures to cushion consumers from soaring global oil prices.
Zitap suggested such cuts must include pegging the fuel tax rate at 10% for both diesel and petrol from the current 21% and 39%, respectively, while also calling for the release of strategic reserves.
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It proposed that the government cut expenditure, adding that Treasury should “immediately issue a notice to all ministries, save for essential services like health and education, to cut their recurrent expenditure pipeline by 15%. Non-essential travel, meetings, workshops, and fairs must be stopped.”
The government is targeting to collect revenue amounting to ZiG288 billion (US$9,4 billion) against planned expenditure of ZiG290,9 billion (US$9,5 billion) this fiscal year.
“The government can restart the National Railways of Zimbabwe train service both within major cities and between cities to mitigate transport costs.
“Registered public transport operators can also get tax holidays to incentivise them to maintain low prices.”
“For tobacco farmers — reduce levies paid to the Tobacco Industry Marketing Board to limit the exposure to farmers who, on one hand, face generally low market prices and, on the other, rising transport costs.”
Zitap also called on the government to open up the energy market by allowing institutions with free funds and trade advantages to import their own fuel.
It also proposed that the government offers six months of 0% duty on electric vehicle (EV) imports, as the fifth largest lithium producer globally, a key component for EV batteries, giving Zimbabwe significant negotiating power with EV manufacturers.
“If electric vehicles become competitive price-wise, rational Zimbabwean consumers will cross over to this new technology.
“These duty-free imports could also include equipment related to charging and servicing of electric vehicles to boost the market,” Zitap said.
It also called for the diversification of fuel supplies, which includes the government taking full advantage of opportunities opening up in Africa, Nigeria and Angola in particular as major oil producers.
“The Mutapa Investment Fund can surely lead in getting deals/equity to support refineries in Angola and Nigeria and guarantee future supplies through the Lobito corridor,” Zitap said.
Meanwhile, the Zimbabwe Coalition on Debt and Development (Zimcodd) noted that the justification for the price increases is framed around “cost pressures” and the need to prevent arbitrage and supply distortions, yet the public lacks clarity on what these cost pressures are.
“Global shocks do not operate in a vacuum. They interact with domestic pricing systems and this is where the Zimbabwean case becomes more complex,” the organisation said.
“If global pressures were the only factor, price movements would be more gradual and broadly aligned with regional trends.
“Instead, Zimbabwe’s increases appear sharper and more immediate. This creates a legitimate question: are we witnessing only the pass-through of global prices or also the compounding effects of domestic vulnerabilities such as narrow supply routes, limited competition, weak transparency in procurement and pricing and the costs of risk that are ultimately being pushed onto consumers?”
Zimcodd said this was where the government’s own narrative began to raise questions.
“Zera maintains that it is ‘cushioning’ consumers, noting that diesel could have reached US$2,20 per litre without intervention, yet in March, a similar argument was made where diesel was set at US$1,77 per litre with authorities claiming it could have been US$1,90 without cushioning,” Zimcodd noted.
“What is revealing is that even as the government claims to be protecting consumers, the actual price trajectory continues to rise significantly.
“Cushioning, in this context, does not prevent increases; it merely moderates them while still transferring the burden to citizens.”
Zimcodd asked what constitutes cushioning in practice — levy adjustment, a subsidy-like intervention, a pricing band or a policy directive.
“If Zimbabwe truly has three months of fuel reserves already secured, then current price increases are not responding to immediate shortages but to anticipated or projected costs.
“This raises a critical economic question: why are future risks being priced into present-day consumer costs so aggressively? In effect, citizens are absorbing the shock in advance, rather than being shielded from it. That approach matters because “pricing in risk” can quickly become self-fulfilling.”
Zimcodd warned that higher fuel costs increase the economic burden across sectors, depress tax compliance and can force the government into ad hoc fiscal measures that crowd out social spending.