Expected fuel price increase confirmed.

The long rumoured fuel price hike finally came to fruition yesterday, 21 May in what should be a surprise only to the very few who weren’t paying attention to developments. This joins the long list of rumours which government arms have vehemently denied only to be proven true. The increase was approximately  50% across the board with Petrol at ZWL$4.98 (up fromZWL$3.26) and diesel at ZWL$4.85(up from ZWL$3.22).

What would’ve come as a surprise though was the manner of the price increase which was carried out, an almost clandestine manner. The bulk of the nation would’ve likely missed reports that Reserve Bank Governor John Mangudya had announced that fuel companies would have to buy foreign currency on the interbank market at prevailing rates (3.48 from the previous day) as opposed the abolished 1:1 rate at which they were still being availed foreign currency for imports. The announcement came late in the day on Monday the 20th. Unsubstantiated reports of price hikes were circulating on social media by night time.

Without a big announcement and national address such as that employed in the previous price hike, fuel prices were raised unceremoniously. At first, met with disbelief and rubber stamped by Zimbabwe Energy Regulatory Authority in the morning. The fuel price increase was met with mixed reactions with many accepting that the situation needed to change as citizen taxpayers were financing the artificially cheaper and unavailable fuel.

Commuters had on Monday the 20th received a boost as the transport ministry announced that ZUPCO buses would ferry people for 50 cents. For many commuters in the CBD sunshine soon turned to rain as commuter omnibus operators had very quickly effected a hike in fares to match the price increase they had been greeted by at the pump. This left many struggling to return home as the private operators were too expensive while ZUPCO does not have the capacity to ferry all. Images were quick to do the rounds on social media of crowded bus terminals.

While the fuel price increase comes with many effects we are yet to see there is a general consensus that the Reserve Bank was forced to throw in the towel on an unsustainable policy. We recently also saw a turnaround on the so-called austerity as the national budget was set for a 50% increase. In light of the events of January preceded by a fuel price increase police presence was notedly heavy in urban areas.