Zimbabweans received news of another fuel price hike on Monday, as authorities continue to grapple with an unfavourable exchange rate.
It is the second-highest fuel price since August 3, when petrol prices increased from $7.55 per litre to $9.01, and the fourth hike in August. There were three increases in July
This week’s price hike saw the pump price of petrol, which is blended with 20% ethanol, going up by 89 cents (Zimbabwean dollars) to $10.01.
The price of diesel increased by an even larger margin, going up by 96 cents to $10.32 per litre. In January, petrol was retailing at $1.36 per litre, but the exchange rate was officially pegged at 1:1 between the US dollar and its local transactional instrument, the bond note.
The Zimbabwe Energy Regulatory Authority (ZERA) attributed the latest price increase to “Free On Board price movements and the revised duty regime.”
At least $2.76 and $2.92 of the fuel price goes to the government levied excise duty on fuel.
The local currency, which is also the biggest determinant of fuel prices in the country, has continued to weaken, and as of Monday was officially trading at 10.3557 to the US dollar.
Finance and Economic Development Minister Mthuli Ncube has stated on record that Zimbabwe’s fuel prices are low in light of the official foreign currency exchange rate, which is currently around 1:10.3557 between the United States dollar and the Zimbabwe dollar.
This would mean the new price of fuel remains below US$1, making it among the cheapest in the region and internationally, according to Ncube.
Ncube has said he would like to see the price increase to the equivalent of $1 a litre.