The day before yesterday the government said that they were working on measures to reduce the price of fuel including mandatory blending up to E20 (20% ethanol in petrol). They also said they would only review the price of fuel once a month. Now they have just done the opposite of it all. Yesterday evening the Zimbabwe Energy Regulatory Authority announced new fuel price increases in both USD and ZWL terms.
- The price of Diesel is now US$1.74 per litre up from US$1.71 which was announced on the 6th of this month
- In ZWL terms, ZERA is now using the prevailing Willing Buyer Willing Seller on the day they make the announcement and Diesel is now selling for just under $500 ZWL per litre.
- For petrol (E20 presumably) the prices are now US$1.68 up from US$1.64 per litre and $481.02 ZWL using the WBWS rate.
Even with these changes to the rate being used to express ZWL prices do not expect to find many places that will sell you fuel in ZWL. The government recently announced more service stations that will sell fuel in ZWL but do not expect to be one of the beneficiaries as the fuel tends to run out as soon as it arrives.
Not good for inflation
Fuel price increases especially in USD terms are never a good thing when it comes to keeping inflation under control. Fuel tends to be an important input cost driver in Zimbabwe. Manufacturers use Diesel to power their delivery trucks, and generators when ZESA is down which is often and power their machinery. Retailers who import incur increasing transport costs when the price goes up. Then there are ancillary services such as the internet that also go up in relation to rising fuel costs. The result is that prices inevitably go up in the aftermath of fuel price increases.
Leave A Comment