Zimbabwe imported many fuels, including diesel, according to ZimStats data for June 2022. Leaded gasoline, unleaded petrol, and diesel were imported directly as well as with free funds. Free funds are funds held in domestic Nostro or foreign currency accounts (FCAs) by companies that import fuel as well as individuals who can directly import fuel. The majority of Zimbabwe's diesel and gasoline were imported from Mozambique and Singapore during the month under review. According to the data available, Zimbabwe's other trading partners did not provide any fuel. This essentially means that whatever supply chain bottlenecks Zimbabwe's trading partners experience as a result of Chinese lockdowns and the Ukraine-Russia war in general trickles down to Zimbabwe as a fuel importer.

After the EU embargo goes into effect, approximately 2 million BPD-3 million BPD of Russian oil and products may have to find new homes. Russia has redirected a large portion of its flows eastward to Asia, but it may not be able to immediately accommodate and find willing buyers for trade flows previously going to Europe, especially given the ban on services handling Russian oil cargoes unless the oil is sold at or below a certain price cap. Looking ahead, the 5th of December will be a watershed moment in the petroleum industry, affecting many fuel dynamics. This article will examine briefly the effects of the EU embargo on Russian oil on December 5th. For example, between November 1 and November 11, Russian diesel loadings bound for the Amsterdam-Rotterdam-Antwerp hub increased by 126% to 215,000. Russia is still Europe's largest supplier of diesel. This means that after the embargo, the oil supplied to Europe must find a new market, and Africa may provide new opportunities for Russian oil. This move will benefit importers such as Zimbabwe. While fuel prices in the EU are expected to rise, African countries may see a temporary increase in fuel prices followed by a price normalization because some African countries have maintained good relations with Russia.

Look at Zim fuel trade partners:


In August, Mozambique's Minister of Mineral Resources and Energy, Carlos Zacarias, stated that if this becomes a viable option, Mozambique may purchase fuel from Russia. The Russian ambassador also made a similar suggestion. According to Alexander Surikov, any purchase must be made in Russian currency, the rouble.

The concept of obtaining fuel from Russia originated with a group of Mozambican businesspeople from the Confederation of Mozambican Business Associations (CTA) who met with Surikov. Businesses were interested in directly importing fuel from Russia, but this would only be feasible if approved by the government and the Mozambican Central Bank. The only disadvantage is that the Bank of Mozambique does not keep large amounts of roubles on hand. To pay for the fuel in roubles, you'd have to sell other currencies to the Russian central bank to get roubles.

The Bank of Mozambique would have to consider whether it is really worth surrendering some of its reserves in dollars or euros in order to acquire roubles, especially given that Russia would face additional sanctions from most Western powers as a result of its onslaught against Ukraine. Russian is generally less expensive than other types of fuel, which could help to reduce the cost of living in Mozambique.

This embargo on December 5th will provide an opportunity for Mozambique to acquire more fuel, which will also benefit Zimbabwe, which is already importing fuel from Mozambique, and the price of fuel in the Zimbabwean market may fall marginally as a result of the EU embargo on Russian oil, which will mean more fuel for African markets.


According to oil flow analytics, Europe has increased its diesel imports from Russia this month as the EU embargo on Russian oil products begins on December 5. Russia is still the largest supplier of diesel to Europe, which will have to replace more than 500,000 barrels per day (BPD) of diesel supply after the embargo, according to the International Energy Agency (IEA). Through October, EU and UK imports of diesel from non-European/non-Russian sources surpassed a massive 1 million BPD, owing to abundant supply from the Middle East and Asia. It is even more difficult to predict what will happen with Russian diesel after the EU embargo than it is to predict what will happen with Russian crude oil, which will be banned on December 5.

According to the IEA's November Oil Market Report, EU countries reduced Russian diesel imports by 50,000 BPD to 560,000 BPD by October. As the EU embargo on Russian diesel imports takes effect, competition for non-Russian diesel barrels will be fierce, with EU countries forced to bid cargoes from the United States, the Middle East, and India away from their traditional buyers.

According to the EU's energy policy chief, the EU expects its regulations to be completed in time for the implementation of a G7 plan to cap the price of Russian crude oil on December 5. From that date forward, the EU will prohibit Russian crude imports as well as Russian oil products, depriving Russia of oil revenues and forcing one of the world's top oil producers and exporters to seek alternative markets. Furthermore, as an addition to the EU embargo, a G7 plan will allow shipping service providers to assist in the export of Russian oil, but only at enforced low prices. This is also set to go into effect on December 5.

The International Energy Agency said this week that the decision to deprive Moscow of revenue would increase uncertainty in the oil market and put pressure on prices, including diesel. Russia's oil production could fall to as low as 9 million barrels per day (BPD) in December, when the EU embargo on Russian crude oil imports takes effect, according to Russian news agency TASS, citing analysts at the Energy Development Center.

According to some experts, the expected sharp drop in Russian oil production will cause an increase in international oil prices, especially since the OPEC+ group is lowering its target production for November. Russia's oil production, excluding condensate, was 9.9 million barrels per day in October, well below its monthly quota.

Russian oil production, including condensate, was 1.47 million tons per day, or 10.78 million BPD, in October. October output was slightly lower than the 10.8 million BPD reported in September. However, the production decline could accelerate in November as the EU prepares to impose an embargo on Russian crude imports beginning on December 5, according to the Russian business daily Kommersant, which was published at the end of October.

Russia and Zimbabwe

According to recent developments, Zimbabwe has requested additional agricultural commodities from Russia as well as the start of fuel supplies. The Ukraine conflict has disrupted wheat supplies from Russia, the world's largest wheat exporter. Russian wheat and fertilizer exports to Zimbabwe, a major importer of Russian wheat and fertilizer, have been hit. According to Russian Natural Resources and Environment Minister Alexander Kozlov, Zimbabwe pushed for more wheat and petroleum from Russia at a meeting of the Russian-Zimbabwean Intergovernmental Commission in Harare last year.

Zimbabwe numbers

Zimbabweans have been forced to cut fuel spending as a result of the product's rolling price increases as a result of the Russia-Ukraine war. According to Zimbabwe Energy Regulatory Authority (Zera) data, diesel imports fell by nearly three million litres to 75 million litres and petrol imports fell by one million litres to 55,6 million litres between February and March 2022. Between January and March, diesel imports averaged 75 million litres per month, while gasoline imports averaged 54 million litres. According to Zimstat statistics for the month of June, Zimbabwe imported just over US$70 million in fuel. This demonstrates that the average monthly demand for diesel imports is just under 100 million litres and less than 70 million litres for petrol imports.

Fuel dealers have been struggling to replenish stocks, resulting in frequent stock-outs in the industry as prices rise. While fuel is only sold in hard currency, some service stations accept FCA payments. In 2020, monthly diesel and petrol imports averaged 61,3 million litres and 33,6 million litres, respectively, and after Covid-19, that number can only increase due to the opening of the economy, so Zera will be interested in the pricing dynamics that will occur following the EU's Russian fuel embargo.

According to the data above, fuel prices increased by 5% in March, when the war in Ukraine began, from $1.44 to $1.51 per litre for both petrol and diesel. In addition, the month of June saw the highest prices for US dollar-denominated fuel, reaching a high of US$1.77/litre for petrol and US$1.88/litre for diesel. Despite the fact that the Zimbabwean government has eliminated some taxes, the effects of global developments on Zimbabwe's price dynamics will continue to play a role.

Following ZERA's 2022 commitment to actively review Zimbabwe's fuel market dynamics, each month is typically accompanied by four fuel price cap adjustments, which are made in both ZWL and US$ terms. The Russian war has had a significant impact on importing countries such as Zimbabwe. Its ramifications are wreaking havoc on developing countries like Zimbabwe, as supplies of these goods are disrupted by both the war and the sanctions imposed by the West on Russia and some of its allies.

Conclusion: Solution

In March 2022, Russian President Vladimir Putin demanded that "unfriendly countries" use rubles to purchase his country's oil and gas, sending energy prices even higher as markets continue to be roiled by his military's assault on Ukraine. After launching a massive military campaign against Ukraine a month ago, Russia was hit with crippling economic sanctions. However, efforts to economically isolate Russia was complicated by the fact that the European Union relied on

With the financial noose tightening and the European Union divided on whether to sanction Russia's energy sector, Putin responded by stating unequivocally that European countries should buy their energy in rubles, which strengthened the Russian currency. Looking at the Russian oil ban that went into effect on December 5th, the opportunity for countries like Zimbabwe is actually quite good, and ZERA, as the regulatory authority, should take advantage of this by attempting to find a way to procure oil directly from Russia. As a result, the global fuel price dynamics that affect other countries will not affect Zimbabwe in the long run, and fuel prices may even become sustainable and affordable.