Government hikes fuel price as exchange rate scales up

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  • Petrol price has gone up from ZWL$71.62 per litre to ZWL$93.15 while diesel price has increased from ZWL$62.77 per litre to ZWL$83.36.
  • US$ prices remains unchanged
  • The local currency traded at 80.46 to the greenback, up from 76.75 which was recorded last week

Harare – The Zimbabwe Energy Regulatory Authority (ZERA) on Wednesday increased the price of petrol and diesel, a day after the official exchange rate between the US dollar and the Zimbabwean dollar scaled up following the weekly foreign currency exchange auction system.

In a notice, ZERA announced that petrol price has gone up from ZWL$71.62 per litre to ZWL$93.15 while diesel price has increased from ZWL$62.77 per litre to ZWL$83.36.

“Please note the US$ prices of last month at $1.09 for diesel and $1.28 for blend remain unchanged. Operators may however, sell at prices below the cap depending on their trading advantages,” ZERA said.

The upwards review in fuel prices came a day after the Zimbabwean dollar lost further value against the US dollar following Tuesday’s foreign currency exchange auction system. The local currency traded at 80.46 to the greenback, up from 76.75 which was recorded last week.

The government introduced the foreign currency exchange auction system in a bid to stabilise the rate of growth in price level which have long been pegged against the US dollar value prevailing on the parallel exchange market.

With inflation hovering above 700%, the country worker’s salaries have fast depreciated in value while the impact of COVID-19 has and drought have further worsened living conditions for average households.

Since the reintroduction of the local currency, government has resorted to periodic policy tinkering in a desperate bid to preserve its value. The foreign currency auction system is the closest to what several market players and economists have been recommending to establish an equilibrium between the official exchange market and the parallel market, in what is basically a market driven exchange rate.

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