Zimbabwe has raised the price of petrol and diesel by 147% and 152% respectively in local currency after an earlier review of the exchange rate, adding pressure to already pressed citizens grappling with poor earnings.
The southern African nation conducted its first weekly foreign currency auction yesterday, which saw the Zimdollar trading at an average of 57.3582 to the US dollar after the government allowed it to freely float. Also, this resulted in the removal of the US$1: Z$25 fixed interbank exchange rate system.
Exporters have been lobbying for the removal of the fixed exchange rate of US$1: Z$25 placed for the duration of the Covid-19 lockdown as it was not in tandem with the prevailing economic challenges.
Zimbabwe has been has been experiencing fuel shortages for weeks now largely attributed to the disparity between the local currency and US dollar. With effect from today, as the country try to respond to rising fuel shortages, a fuel pump price of Z$71.62 or US$1.28 per litre for petrol and Z$62.77 or US$1.09 per litre for diesel will apply. This is an increase from Z$28.96 for petrol and Z$24.93 for diesel.
The last round of fuel price hikes was at the beginning of this month. The Zimbabwe Energy Regulatory Authority said: “operators may however, sell at prices below the cap depending on their trading advantages”. However, this time around buyers can choose to pay in currency of their choice.
Fuel situation worsened in the last few days with most of the fuel pumps in the capital still dry. Long winding queues are visible at most fuel stations while most are completely empty. Frustrated and desperate motorists are spending long hours parked at fuel stations.
The new fuel prices evoked anger among Zimbabweans. “The US dollar price is too much, fuel will still be cheaper on the black market with the ethanol blend how is fuel 60% more expensive than in South Africa even with the shipping costs factored in,” said one twitter user. On the other hand, the increase is poised to see reduced fuel queues which were now the norm of the day across the country.