Fuel prices shoot up 50%, domino effect on basic commodities expected

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By Leopold Munhende

THE Zimbabwe Energy Regulatory Authority (Zera), Tuesday afternoon capitulated to market forces agreeing to an increase of more than 50% in the price of fuel.

Zera had late Monday, declared the prices would remain the same despite the Reserve Bank of Zimbabwe, announcing it would no longer subsidise the precious commodity, with oil companies now expected to source own foreign currency from the inter-bank market.

“The petroleum industry is advised that the prices of fuel has not changed and operators are expected to continue selling fuel into the market as is expected of them,” read a statement signed by Zera acting chief executive officer, Eddington Mazambani.

Muzarabani at the time warned any operator found hoarding fuel would be punished and Zera compliance as well as police officers had been deployed to monitor the situation.

However, by mid-day Tuesday, Zera had changed tune and Muzarabani was forced to issue another statement announcing the new prices. More tellingly according to the statement, the latest price increases will apply for just under a week.

“Zera advises that in terms of amendments to Statutory Instruments 9 and 10 of 2019 and the new measures taken by the Reserve Bank of Zimbabwe on fuel procurement based on the inter-bank rate, applicable prices for the period 21 May, 2019 to 26 May, 2019 are diesel RTGS$4.89 and petrol RTGS$4.97,” the statement said.

A 150% fuel price increase in January, announced by President Emmerson Mnangagwa, triggered violent protests across the country that left at least 17 people dead and scores injured after government deployed the army leading to the use of live ammunition.

Government has been providing foreign currency to oil companies for the procurement of fuel in a bid to keep the price down but the move has resulted in sustained shortages with queues now a permanent feature across the country.