The rate at which prices are going up in Zimbabwe is disturbing. It all goes to show how unstable and porous the economy has become. The other day I was discussing a ZESA tariffs hike. A day after that I got to discuss an Econet bundle prices review. Two weeks ago I covered a fresh ZERA fuel prices review. Without even a breather, today, the 20th of May 2022, ZERA has announced another fuel price upward review. They announced on social media yesterday some few minutes towards midnight.
Petroleum Prices – Effective 20 May 2022
The new prices are as follows:
| ZWL | US$ | |||
| Diesel 50 (ZWL/Litre) | Blend E15 (ZWL/Litre) | Diesel 50 (US$/Litre) | Blend E15 (US$/Litre) | |
| Maximum Prices | 499.56 | 481.02 | 1.74 | 1.68 |
The other notable change is that the blending ratio has increased from 10 percent to 15 percent. I guess this is a build-up to getting to 20 percent at the end of May 2022 as they indicated.
The old prices were as follows:
| ZWL | US$ | |||
| Diesel 50 (ZWL/Litre) | Blend E10 (ZWL/Litre) | Diesel 50 (US$/Litre) | Blend E10 (US$/Litre) | |
| Maximum Prices | 283.87 | 271.85 | 1.71 | 1.64 |
Summary Of The Fuel Price Changes
In ZWL$, the price of diesel per litre has gone up by ZWL$215.69
In ZWL$, the price of petrol per litre has gone up by ZWL$209.17
In US$, the price of diesel per litre has gone up by US$0.03
In US$, the price of petrol per litre has gone up by US$0.04
Noteworthy Talking Points
The Truth Is Not Being Told
It is weird that not too long ago there were tax cuts on fuel. We all expected that would lead to price reduction yet the opposite is happening. I recently did an article discussing plans by ZERA to increase the blending ratio to 20 percent at the end of this month. I mentioned how the Energy and Development ministry lauded that move as a means to reduce fuel prices.
They specifically mentioned that increasing the blending ratio from 10 percent to 20 percent would reduce the petrol price by another US$0.07. Well, they have just increased the blending ratio to 15 percent (from 10 percent). So we should have seen a US$0.035 reduction in the petrol price. Instead, the price of petrol has increased by US$0.04.
In that article, I said something at the end that now turns out to have been prophetic. I said, ‘Moving ahead I think it will be interesting to see what happens. Blending is being insisted on due to the rationale of reduced fuel prices. Will the prices remain down or we will still see increases and some other bases will be cited?’ I made those remarks because I had a strong feeling we would see a price increase despite an increase in the blending ratio.
It is interesting that in some updates from before ZERA would cite the basis of a respective fuel price review. Lately and this time around again, they did not cite any basis. I do not wish to speculate but clearly, the inconsistencies and contradictions reflect a disturbing trend. The lack of policy consistency continues to plague the Zimbabwean economy. At this rate, it is not surprising to hear of another fuel price hike during the first or second week of June.
The sad thing about rising fuel prices is the ripple effect. We are already contending with a depreciating local currency and rising inflation. These fuel prices will only add fuel to an already raging fire. Ordinary citizens are the biggest victims given that they are barely making ends meet.
