The Zimbabwe Energy Regulatory Authority (ZERA) has reviewed upwards price of fuel for both petrol and diesel by an average of 11 percent –a few days after another increase as international crude oil prices continue to soar amid heightened conflict in Eastern Europe.
According to ZERA’s latest weekly review, diesel will now cost a maximum of US$ 1.68 and petrol US$ 1.67 from a flat fee of US$ 1.51 set last week, reaching unprecedented levels in as many years.
“Prices have been set in accordance with the increasing oil prices on the international market, which the Authority is continuously monitoring,” said ZERA.
Russia- a major global producer of oil has been place under sanctions by the western countries which includes the US, Britain and EU for its invasion of Ukraine.
The West has since issued a boycott of Russian oil, a move that has affected supply into the global market, pushing demand.
The boycott has spiraled oil prices to nearly US$ 140 a barrel from levels of around US$ 88 per barrel in January this year, surpassing the 2008 global financial crisis record.
The development is a huge setback to the country’s economic recovery efforts as the effects of further fuel price hikes will have a multiplier effect on the entire economy grappling with hyper-inflation.
Already the country has seen month-on-month inflation rising to 7 percent in February –the highest since August 2020 as exchange rate instability and currency depreciation continue to dampen recovery.
For key productive sectors of agriculture, manufacturing and mining, the high cost of fuel will have a negative impact on profitability.
Analysts however say the biggest losers will be the consumers, as producers will simply pass on the cost burden to the end-users.
