Fuel Prices Edging Towards US$2 In Zimbabwe

Fuel prices which had gone down at some point are now back on an upward trajectory. Fuel prices were last reviewed upwards effective on the 7^th of June 2022. True to what I predicted just over 2 weeks later the prices were reviewed upwards again. The recently gazetted became effective on the 24^th of June 2022. As you will see, if the prevailing trend keeps up, it will not be surprising for the next review to entail prices close to or around US$2. The latest review came with an interesting mention by ZERA which I will highlight in some moments.

Petroleum Prices – Effective From 24 June 2022

The old prices are as follows:

The new prices are as follows:

NB: This time ZERA mentioned something interesting – “The above prices would have been at Diesel US$2.01 and Blend US$1.84 without Government intervention”. I will touch on that later on.

Magnitudes Of Change

Previous Magnitudes Of Change

Some Things To Talk About

Looking at the recent magnitudes of change you can see that the price of diesel surged by a whole 12 US cents. That is a notable change especially when you compare it with previous price movements. I wish ZERA would have at least explained why this was so this time. It will be interesting some time towards the end of 2022 when I do some annual data analytics on these fuel price reviews.

I have grown tired of repeating how the Energy Ministry lied. They lied about how bringing back blending would reduce the price of petrol. Ever since the re-introduction of blending the prices have been going upward with each review. I will not get into possible reasons why they insist on ethanol blending – most of you probably know why.

Then there is this statement,

“The above prices would have been at Diesel US$2.01 and Blend US$1.84 without Government intervention”

I know ZERA mentioned this statement as an effort to rationalize the recent fuel price hike but I think it is inappropriate. It is a futile and somewhat childish way of trying to justify what is unjustifiable. That statement is meant to make us believe the government went out of its way to settle for the current prices (which are still too high). The fact remains that the relevant authorities are not doing enough to stabilize fuel prices. As I always say, some fundamentals are being ignored by the government. If you ignore the fundamentals you cannot expect things to magically fall into place. I bet you these prices, Diesel US$2.01 and Blend US$1.84, might be a hint on the upcoming fuel prices.

The continued spike in fuel prices does not do Zimbabweans any good. The Zimbabwean dollar’s value continues to plummet which can only erode the income and savings of many. We are living in an economy using reactionary measures rather than proactive ones. The more this continues, the more we will continue to be bombarded by news of price hikes.