Zimbabwe’s inflation, exchange rate depreciation spark fuel price surge

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  • ZWL petrol price now ZW$104.82 per litre from ZW$99.35
  • USD petrol price now US$1.26 per litre from US$1.21
  • ZWL diesel price now ZW$105.58 per litre from ZW$100.91
  • While USD diesel price has gone up to US$1.27 per litre from US$1.23.

The Zimbabwe Energy Regulatory Authority (ZERA) has announced an increase in the price of petrol and diesel in both ZWL and USD terms, following a rise in inflation and the sustained soaring of the Zimbabwean dollar against the United States dollar at the official foreign currency auction.

In a notice, ZERA announced that effective today (5 February 2021) the ZWL price of petrol will be ZW$104.82 per litre increasing by over ZW$5 from ZW$99.35 while the USD price will be increased by US$0.05 cents from US$1.21 per litre to US$1.26 per litre.

Similarly, the price of diesel has climbed in ZWL terms to ZW$105.58 per litre from ZW$100.91 per litre and in USD terms a single litre of diesel will sell for US$1.27 up from US$1.23.

This hike in fuel comes on the heels of the Zimbabwean dollar shedding almost 2% in value against the United States dollar since the beginning of 2021 having settled at ZW$83.37 per US$1 at the latest foreign currency auction held on the 2nd of February 2021.

Of important note, however, is the complementary rise in the USD price of fuel which some economic analysts are accrediting to a rise in oil prices which had fallen to record lows during the beginning of the COVID-19 pandemic citing that Zimbabwean fuel prices are built purely on the actual delivered cost of refined fuels with a set of taxes and mark-ups then added.

Furthermore, this upward review of fuel prices by ZERA follows a rise in the month-on-month inflation rate for the first time since July 2020 in the just-ended month of January 2021 by 5.43%.

This fuel price hike can be expected to have a further negative impact on the rate for February 2021 as it is likely to drive prices of basic commodities and services up.

Equity Axis News.

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