RBZ reforms scuttled as fuel price rises by 50%

RBZ reforms scuttled as fuel price rises by 50%

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By Staff Reporter

FUEL retailers in Zimbabwe have hiked prices by up to 50% as the southern African country faced fresh shortages amid rampant inflation and a devalued currency.

Diesel and petrol prices went up at the weekend from about Zim$400 000 (US$1.6) per litre to between Zim$600 000 and Zim$650 000 dollars.

The scarcity also pushed the black market price to Zim$1m per litre.

The price hike came just over a month after fuel stations increased prices by over 100% and triggered a spate of bus fare increases, hitting hard millions of long-suffering workers reeling of a record inflation rate of just less than 1 200%.

State media is attributing the fuel shortage to the fall of the Zimbabwe dollar against major currencies and the squeeze on illegal foreign currency dealers who were financing some of the fuel imports.

Zimbabwe's reserve bank last week devalued the local currency to Zim$250 against the greenback and introduced sweeping currency reforms which the bank's chief said were aimed at snuffing out a flourishing parallel market in currency.

Economic analysts warned afterwards that the country would grind to a halt as it had come to rely on private fuel imports by dealers who bought foreign currency on the black market.

An AFP correspondent in Harare reported that long, meandering queues, previously a familiar landmark at fuel stations, resurfaced while despondent commuters waited hours for the few available buses plying their routes.

Zimbabwe has faced serious fuel shortages since 1999 and the government blames sanctions imposed on President Robert Mugabe and members of his inner circle at the time for this.

When the shortages are at its worst, some gas stations go without fuel for months, forcing buses and private cars off the road and leaving many commuters no option but to walk or cycle to their workplaces - AFP
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