So yesterday the Zimbabwe Regulatory Authority (ZERA) announced new fuel prices. Fuel has prices have been increased about 9 times since the beginning of the year so another price increase now even hardly qualifies as news.

What is news is that from now on people will be buying fuel at different prices depending on which town they live in/are closest to. Those in/around Harare will pay the base prices of $10.32 ZWL for diesel and $10.01 ZWL for petrol.

Prices for other towns

CityDieselBlend Petrol
Vic Falls10.8610.56

Why is ZERA charging different prices?

It looks unfair at first glance however, there is a logic to it all. Fuel is brought into Zimbabwe by licenced Oil Companies who store it at their depots in Harare and Mutare.

Dealers (service stations) then buy fuel in bulk and have it delivered to their service stations where they sell it from pumps. One reason why the shortages were more acutely felt in other parts than others was because the cost of transporting fuel to remote parts was not factored in.

The result was that dealers would shun these remote areas and delivered fuel to areas closer to the Oil Companie’s depots. This way they could protect their profit margins.

Because fuel is in short supply anyway there was never really any incentive to deliver to Plumtree for example. People in these areas had to cross the border to fill up at times.

People are still going to be angry about it

In fact, during the multicurrency era, people paid different prices depending on the nearest town. Despite this the new zonal prices have already generated controversy, accusations, confusion and consternation among the public.