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Diesel and petrol up ticked by 10% and 11% respectively
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Minister Ncube expected prices to remain unchanged till year end
Harare - Energy regulator, Zimbabwe Energy Regulatory Authority (ZERA), has today released the new fuel prices for December with all ZWL fuel prices reviewed upwards while USD petrol saw a marginal 1% increase in US dollar terms. This is against Economic Development and Finance Minister Professor Mthuli Ncube’s expectations that fuel prices were to remain unshaken in November and December.
In November, Minister Ncube told a business meeting in Glasgow he expected that a cut in the fuel levy through SI 254A issued last month would help freeze fuel prices for November and December.
“For those of us going back to Zimbabwe, I can say we are likely to see the price of fuel unchanged in November and December,” said Ncube in Glasgow, Scotland last month.
However, fuel prices for December rose by 10% and 11% for both diesel and petrol pressured by a fading local currency and scarcity of the Zimbabwe dollar-priced fuel.
A litre of diesel and petrol now costs ZWL150.31 and ZWL154.56 from November prices of ZWL136.44 and ZWL138.70 respectively while Petrol rose by 1% to US$1.42 per litre from US$1.40 in November. Only US dollar-denominated diesel price remains unchanged at November prices of US1.38 per litre.
The rise in fuel prices parallel Professor Mthuli Ncube’s expectation in Glasgow, Scotland that fuel prices in Zimbabwe will remain unchanged for the remainder of 2021.
Treasury through the amendment of SI 254 of 2021 cut the fuel levy by between 34 and 63% last month reversing a September regulation that increased the strategic reserve levy to 12.7c per litre for diesel and 8.7c for petrol which was revised downwards to 4.7c and 5.7c per litre respectively in their orders.
However, inflationary pressures and lack of confidence in the local currency failed to stave off a petrol price hike. The Central Bank further revised the year-end inflation target to a maximum of 60% for the third time since 2021, reflecting the shambles in which the economy is currently operating.
On a global scale, oil prices rose early on Tuesday for the second day in a row, as traders are cautiously optimistic that the new Omicron COVID variant would not lead to massive lockdowns around the world to the point of severely reducing global oil demand.
Oil prices started to rebound on Monday after Saudi Arabia signalled optimism about the demand by hiking its official January crude oil selling prices for Asia and the United States, its biggest markets.
On a week to date basis, global crude oil prices increased by 10.89%.
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