Zimbabwe hikes fuel prices to tackle shortages as it plans new currency roll out

In a bid to tackle Zimbabwe’s worst petrol shortage in 10 years and improve supplies, the price of fuel in the country has been increased by almost three times its current price to $3.31 per litre from $1.24.

Zimbabwe’s President Emmerson Mnangagwa who announced the increase on Sunday, January 13 said prices of petrol and diesel would more than double to tackle a shortfall caused by increased fuel usage and illegal trading.

“Following the persistent shortfall in the fuel market attributable to increased fuel usage in the economy, and compounded by rampant illegal currency and fuel trading activities, government has today decided on the following corrective measures. With effect from midnight tonight, a fuel pump price of $3.11 per litre for diesel and $3.31 per litre for petrol will come into effect. These prices are predicated on the ruling official exchange rate of 1:1 between the bond note and the US dollar and also on the need to keep fuel retailers viable,” Mnangagwa stated.

Meanwhile, Mthuli Ncube, the country’s finance minister had earlier stated that the prices of fuel and diesel in Zimbabwe were lower than other countries in the region and some foreigners were taking advantage buying fuel in bulk in Zimbabwe to resell in neighbouring countries.

Prior to the president’s announcement, diesel cost $1.38 and petrol $1.43 a litre. In Zimbabwe, inflation is hitting hard on the economy and the price of many goods is rising, with inflation averaging 1.58 percent from 2009 until 2018, reaching an all time high of 31.01 percent in November 2018.

Zimbabweans who have been looking to Mnangagwa to change the worsening conditions in the country, especially after his announcement that the country is open for business and the economy would boom under his leadership, are not happy that they still have to pay more for fuel and diesel.

Last year, the government introduced a tax on all electronic devices, saying that the money realised would be used to construct roads and improve both the health and education sectors. Mnangagwa had said it was a painful but necessary part of the government’s attempt to revive the economy. However, the process of reviving the economy is digging deep into the already hollow pockets of Zimbabweans.

Hopefully, these measures would alleviate Zimbabwe of its economic woes and not deepen its crises as people fear.

In December, The Nerve Africa reported that  China was printing a new Zimbabwean currency that would be rolled out early 2020. The country’s finance minister has confirmed that the new currency would be introduced in the next 12 months.