Zimbabwe on the brink as fuel prices double

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By Business Day

Fuel prices in Zimbabwe more than doubled on Sunday after an announcement by President Emmerson Mnangagwa  on Saturday evening.

This was the first time Mnangagwa addressed the nation on the growing crisis around persistent fuel shortages and Zimbabwe’s worsening economic environment.

“With effect from midnight tonight, a fuel pump price of $3.11 per litre for diesel and $3.31 per litre for petrol will come into effect. These prices are predicated on the ruling official exchange rate of 1:1 between the bond note and the US dollar and also on the need to keep fuel retailers viable,” Mnangagwa said at State House in Harare.

Before the increase, diesel cost $1.38 a litre, and petrol $1.43 a litre.

Mnangagwa was flanked by deputy president Constantino Chiwenga, agriculture minister Perence Shiri and finance minister Mthuli Ncube.

Ncube on Friday told a town-hall meeting in the affluent Borrowdale suburb in the capital that the country could expect to have a new currency within a year.

Fuel queues have worsened in Zimbabwe since the start of the new year. The demand for fuel intensified last week with the start of the new school term. 

Mnangagwa said some were bent on taking advantage of the current fuel shortages to cause unrest and instability in the country.

“Such politically motivated activities will not be tolerated,” he said, indicating that the country’s military would be on the lookout to curb the misuse of the fuel.

An increase in the price of fuel is likely to spark a further hike in the prices of goods and services.

Mnangagwa, who leaves for a five-nation tour on Sunday, warned the government “will not allow” businesses to trigger a new round of price increases.

“Cognisant of the need to prevent generalised price increases for goods and services in the county with the attendant hardships, that will entail especially to the commuting workforce, government has decided to grant a rebate to all registered businesses in manufacturing, mining, commerce, agriculture and transport sectors.”

Mnangagwa said the details of the rebate system will be announced in due course.

Other measures which Mnangagwa announced to ease the economic pressure include what he said was “a package of measures” to cushion its workers, until a full review of the cost of living adjustment package due to take effect in April in the context of the current budget.

Talks between government and its employees broke down on Thursday, after union leaders rejected a 10% pay hike offered by their employer.