Aug 07, 2019 Fuel price, Zimbabwe, inflation
Whilst South Africans cope with another fuel price increase, some of our neighbours smile in the knowledge that fuel supplied from SA is cheaper in their own countries than at its source, whilst others smile and say that’s a small increase we could easily cope with that increase.
Since the government renamed the RTGS currency as the Zimbabwe dollar in June this year, the prices of basic goods and services have more than doubled. The currency has been decreasing in value whilst the country wrestles with widespread shortages of amongst others fuel, electricity, foreign currency and regular tariff increases.
Zimbabweans are being reminded of the chronic economic collapse ten years ago when the printing of money at will by the government led to hyper-inflation and forced the country to adopt ‘dollarization’ and abandoning its own currency deemed useless by all.
The Zimbabwe Energy Regulatory Authority recently published a statement announcing that petrol would now cost Z$9.01 up from Z$7.55 and that diesel would rise to Z$9.06 - an increase of 26%. Local fuel prices in Zimbabwe have been increased four times since June, and by over than 500% during this year, as a result the local currency value has continue to slide downwards, whilst fuel shortages remain. Demand for fuel has also gone up as businesses and individuals use diesel and petrol powered generators to cope with average daily electricity cuts of in excess of 15-hours, leading to queues at service stations with fuel lasting for hours in the hope of obtaining the precious liquid.
The cost to the Zimbabwean economy of these shortages is crippling and the attempts by its government to reduce subsidies with hikes in both electricity and fuel tariffs in order to strengthen its financial position is once again impacting on its population, angering unions and trade bodies, decreasing the value of their incomes and fuelling inflation again.
The new Zimbabwe government is certainly not making doing business in and with Zimbabwe easy or even attractive in the face of its stated policy of attracting investment as a part of the road to recovery.
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