Zimbabwe fuel price shoots up by 1 300%

Zimbabwe fuel price shoots up by 1 300%

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By Staff Reporter

ZIMBABWE has hiked the official price of fuel by more than 1 300% but this is unlikely to ease shortages of a commodity that has been in short supply since 1999.

Fuel shortages, a result of a severe foreign currency crunch, alongside food shortages, rising unemployment and world record inflation of nearly 1 000% are the most visible signs of an 8-year recession blamed on official mismanagement.

Energy and power development minister Mike Nyambuya said on Thursday the price of petrol had been increased from Z$23 (9 US cents) per litre, under the new system of banknotes, to Z$335 (US$1.34).

The central bank earlier this month slashed three zeros from the country's currency and introduced re-denominated local dollars to deal with hyperinflation, which has forced people to carry large piles of cash even for simple grocery trips.

"It is clear that with the increases of fuel on the international market and with the movement in our exchange rate ... we should also adjust the price of fuel," Nyambuya said in remarks broadcast on state television.

Zimbabwe early this month devalued its currency 60%.

The southern African nation has faced intermittent fuel shortages since 1999 due to scarce foreign currency, grounding both private vehicles and public transport and exacerbating the economic crisis gripping the country.

Although deliveries have improved lately, prices charged by private importers are still higher than the new official price.

At present, Nyambuya sets fuel prices, but last year started a programme allowing private importers to buy fuel using their own foreign currency.

Economic analysts say while this has helped improve supplies, it is still inadequate as Zimbabwe requires about US$45m every month to import fuel for consumption and strategic reserves.

Under the new currency reforms, the current exchange rate is approximately US$1 to Z$250 - Reuters

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