The way the Zimbabwean government has handled the fuel prices in Zimbabwe has been shambolic. They have failed to keep a handle on prices and ultimately this has led to price surges throughout the Zimbabwean economy. Although most SADC countries have been affected by the war in Ukraine, Zimbabwe has been by far the worst-hit with inflation ballooning to triple digits. That would be bad enough but this being Zimbabwe there is always room for some more bad news. On the 24th of June 2022, ZERA approved another fuel price increase.
Starting on the 24th of June the new fuel prices are as follows:
- Diesel will now be selling at US$1.88 up from US$1.76 which was already the highest in the Southern African region
- Petrol (which is really 15% local ethanol) will now be selling for US$1.77 per litre from US$1.73
What the government has to say for themselves
So what does the Zimbabwean government have to say for themselves given all this mess? They actually expect people to applaud them for keeping the price of fuel “low”. The ZERA notice actually hints at this. According to ZERA had the government not intervened fuel would selling at over US$2.01 per litre at the moment. It does not explain how the government did that or why it thinks fuel should be selling for that much at all. All we have is a fuel-saving tip, all you need to do is to drive in high gear most of the time so as to save fuel. What a revelation? If only all motorists knew this obvious and basic fact.
Enough sarcasm though. Something is seriously wrong with the Zimbabwean petroleum sector and the way it is being run. There does not seem to be any plausible reason for why E15 is actually more expensive than normal petrol. The only explanation I can think of is looting. Someone is inflating prices along the chain and making money off the fuel oligopoly set up in Zimbabwe. It would not be the first time. We already have MInister Moyo bilking councils using dubious schemes like Pomona and the recent fire engine scandal. The fuel industry should be liberalised and made more transparent. Like all misfiring sectors of the economy, the hand of the government weighs heavily on it.
Even more puzzling is the silly tendency to continue to display ZWL prices. Now there is an endearing of wishful government thinking. You cannot buy fuel in Zimbabwe in ZWL. We recently found out that you cannot buy LP Gas in ZWL dollars either. That is another looting technique as potbellied bigwigs have set aside ZWL fuel service stations that only they can buy fuel from in ZWL probably using taxpayer funds to subsidise the difference between the very low official rate and the actual market rates.
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