Zimbabwe’s energy regulator on Tuesday, 21 May 2019, increased the prices of petrol and diesel in response to the government’s decision to remove a subsidy on fuel imports.
The Zimbabwe Energy Regulatory Authority (ZERA) gazetted new maximum retail prices of fuel, which would see a litre of petrol rising from RTGS $3.40 (about US$0.97) to RTGS $4.97 while that of diesel would now sell at RTGS $4.89, up from RTGS $3.29.
The RTGS dollar is a new electronic currency called Real Time Gross Settlement dollar that was introduced in March 2019 when the RBZ decided to float the exchange rate.
The gazetted prices, which came into effect with immediate effect, are 46 percent and 49 percent increases for petrol and diesel, respectively.
“Operators may sell petroleum products at prices below the cap depending on their trading advantages,” ZERA acting chief executive Edington Mazambani said in a statement.
This is the second hefty fuel price increase following a 200 percent hike in January, which sparked violent street protests and led to the death of a dozen people after a security crackdown.
The increase came a day after the Reserve Bank of Zimbabwe removed a subsidy it used to provide to the country’s oil importers.
The bank said with effect from Tuesday all fuel importers would no longer access foreign currency from the central bank at the subsidised US$1: RTGS $1 exchange rate that they have been getting all along.
Instead, they are now expected to access funds for fuel imports at the prevailing interbank market exchange rate.
The interbank market rate stood at US$1: RTGS $3.4962 on Tuesday, while the rate stood at US$1: RTGS $5.90 on a thriving foreign exchange black market.
The fuel price increase is expected to trigger hikes of the cost of food and other commodities.