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Fuel prices increases as economic crisis deepens in Zimbabwe

Musitafa Kalyowa by Musitafa Kalyowa
April 5, 2020
in NEWS, World News
0
Fuel prices increases as economic crisis deepens in Zimbabwe

A petrol attendant serves a motorcyclist with two jerry cans attached to his motorbike at a fuel station, on January 11, 2019 in Harare

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Zimbabwe has announced a fresh increase in fuel prices, four months after a price hike triggered nationwide protests and a brutal security crackdown.

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Increasing prices by about 46 percent on Tuesday, the Zimbabwe Energy Regulatory Authority (ZERA) said petrol would cost 4.97 a litre in the local RTGS dollar currency ($1.42/1.27 euro) and diesel would cost 4.89 RTGS dollars.

RTGS dollars are a local electronic currency introduced as Zimbabwe struggles with a shortage of the US dollar notes that have recently functioned as its national currency.

ZERA said the move followed new measures by the central bank removing a subsidy and a preferable exchange rate for fuel importers.

“Operators may sell petroleum products at prices below the cap,” said ZERA’s acting CEO Edinton Mazambani.

The latest price increase had been expected. It followed a 150 percent fuel price hike in January, which sparked violent street protests and led to the death of at least 17 people after a harsh security crackdown.

The Reserve Bank had been under pressure to remove the fuel subsidy, with economists saying some fuel companies were accessing cheap foreign currency and selling it on the black market instead of importing fuel.

Traders at three commercial banks said the RTGS$ had weakened to a low of 4.6 against the US dollar compared to 3.5 at the opening of trading on Tuesday, its biggest drop in a day since the interbank was launched on February 22.

On the black market, the RTGS$ was trading at six to the dollar, having come off highs of 6.3 last week.

The fuel price hike will likely trigger another round of price increases in a country where the inflation rate reached 75.86 percent in April – the highest in a decade.

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Musitafa Kalyowa

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