Fuel prices soar as economy remains crippled

Harare – Diesel and Petrol prices went up on Monday in what has become a common weekly price review for the commodity that has remained in low supply for almost a year now.

Zimbabwe is currently facing a period of major economic collapse largely characterised with power cuts, foreign currency and cash shortages and an unfriendly political environment stemming from last year’s disputed general elections.

According to an announcement by the Zimbabwe Energy Regulatory Authority (ZERA), the maximum pump price for diesel is now ZWL12.08 per litre whilst petrol is now selling at ZWL11.55, representing an increase of 10% from ZWL10.89 and ZWL10.41 respectively.

“The changes in the fuel prices are due to FOB price movements and the revised duty regime (SI 161 OF 2019) applicable from Monday 23 September 2019,” ZERA said in a statement.

ZERA has used the 1:9.5 exchange rate between the US dollar and ZWL$ when the official interbank rate is trading at about US$1 = 19.91 RTGS dollars, and this has prompted others to argue that the fuel price hike model is being poorly implemented and contributing to the persisting supply gaps within the fuel industry.

The increases in fuel prices have far reaching impacts on economic sectors. For instance, it has a devastating impact on the transportation sector.

It has become a trend within the public transportation sector to increase fares subject to fuel price reviews and this has heavily affected commuters.

In a bid to preserve the public from this nightmare, government introduced ZUPCO buses, but they are still yet to meet the growing public demand.

More so, the impact of fuel price hikes also inflate other sectors production costs and with the country currently facing power cuts, most companies have seen their production costs spiralling as they have to turn to alternative energy sources like diesel powered generators.

Resultantly, the increase in production costs in various economic sectors has aggregately resulted in the increase in prices of goods and commodities, and jointly leading the surge in inflation.

Equity Axis News

Raynold Mhotseka

Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, rayjnr.mhotseka@gmail.com and raynoldm@equityaxis.net.

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