Fuel prices decline for the first time this year

  • Petrol price declined by US$0.01
  • Diesel price remained constant in USD terms, dropped in ZWL terms
  • Increases expected going forth however

Harare – Like on every other fifth day of the month this year, the Zimbabwe Energy Regulatory Authority (ZERA) has once again released reviewed prices for diesel and petrol for May, signaling a slight decrease from the previous prices, the first time the costs of the key commodities have dived this year.

In U.S dollar terms the price of petrol has been decreased from US$1.34 per set on April 5, 2021, to US$1.33 whilst diesel 50 remained unchanged at $1.32.

In Zimbabwean dollar terms, however, the price of diesel decreased marginally from ZW$111.77 in March and has now been set at ZW$111.43 while petrol decreased from ZW$112.96 to ZW$112.62 this month.

This comes after a relatively better performance by the local currency against the greenback last month on the foreign currency auction as exchange rate dynamics play a key role in the pricing of fuel, especially in Zimbabwean dollar terms. Inflation also slowed from 240.1 percent in March to 194 percent in June.

However, despite this drop Zimbabwe’s fuel prices are still among if not the highest in the SADC region.

CountryPetrol Prices per litre (US$)
South Africa0.92

The reason being that the government charges high import tariffs on fuel as a means to raise income to fund government programs. As a result, the high tax charges are making the country’s fuel more expensive compared to countries like South Africa, Botswana, Swaziland, Namibia Mozambique, Zambia, and Malawi.

Going forward we can expect the status quo to remain and for the price to even climb at a rate higher than in the prior months following a 77 percent decline in the number of licenced importers from 130 to 30 which could lead to monopolistic collusion following the elimination of most competition.

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