So yesterday the Reserve Bank of Zimbabwe conducted it’s first foreign currency auction and sold over $10 million US dollars at an average rate of $57 ZWL per 1 USD. Immediately after the auction ZERA went to work and recomputed fuel prices using the new rate. The result was that the prices of both diesel and petrol went up by about 100%.
The likely effect of this fuel price hike is that the price of just about everything else is set to go up. Fuel is at the heart of almost every business operation. Farmers use it to irrigate their crops and to transport produce to the market, so do shops and manufacturers. Zimbabwean shops never miss an opportunity to hike their prices and so prepare yourself for another massive round of price increases.
Despite the universal usage of fuel the impact will likely be different to different sectors. Increases will probably not be a 100% increases.