• Zimbabwe's fuel prices are heading towards US$2.00 per litre in April 2026, driven by rising global oil prices (Brent crude at US$106-108) and the country's high tax burden on fuel
• The government has already reduced statutory charges to cushion consumers, absorbing US$0.13 per litre on diesel and US$0.10 per litre on petrol, but further price increases are expected
• Zimbabwe's fuel prices are among the highest in the region, with petrol at US$1.71 per litre and diesel at US$1.77 per litre, due to high taxes and levies (US$0.52-0.54 per litre

Harare- Oil prices have crossed US$100 per barrel for the first time since Russia invaded Ukraine in 2022. Brent crude, the global benchmark, surged well past US$100 when energy markets opened yesterday, reaching a session high of US$119.50 per barrel before pulling back to trade around US$106–108 as of today morning.

The trigger was the second week of the US-Israel war on Iran, whose retaliatory closure of the Strait of Hormuz has taken approximately 20 million barrels per day,  roughly 20% of global oil supply, off the market.

Goldman Sachs has warned that if the Strait remains closed for more than 30 days, Brent could test US$140 to US$150. G7 finance ministers are discussing a coordinated release of strategic petroleum reserves, but no agreement has been confirmed.

For Zimbabwe, a country that imports 100% of its fuel requirements, spends more than US$1 billion annually on fuel imports, and carries Africa's highest pump price tax burden relative to regional peers, the arrival of triple-digit crude oil is not a distant macroeconomic event.

It is arriving at the pump on a timetable determined by ZERA's two-week pricing cycle, and the numbers are unambiguous. Zimbabwe pump prices, already raised sharply on 4 March 2026, are heading toward US$2.00 per litre in April.

If the Hormuz crisis persists, they could go considerably higher.

ZERA raised pump prices effective 4 March 2026, citing rising international oil costs driven by Middle East geopolitical tensions. Diesel increased from US$1.52 to US$1.77 per litre, a 16.4% increase in a single pricing cycle.

Petrol (E5 blend) rose from US$1.56 to US$1.71 per litre, a 9.6% increase. ZERA's own published calculation revealed that the market-determined prices would have been US$1.90 per litre for diesel and US$1.81 per litre for petrol, had the Government not reduced certain statutory charges to cushion consumers.

The Government absorbed US$0.13 per litre on diesel and US$0.10 per litre on petrol. It is important to note what this means. The subsidy buffer Zimbabwe deployed on 4 March was applied against a Brent price that was trading in the US$79–92 range at the time.

Brent has since surged to US$106–108. That cushion has already been consumed by subsequent price movements that have not yet been reflected at the pump.

The March 4 prices are valid for four weeks, meaning the next ZERA review is due around 5 April 2026. That review will be priced against a Brent crude level approximately 20–30% higher than the level used to compute the March 4 adjustment.

Without a further government subsidy, and given that the government has already acknowledged it is reducing charges rather than introducing fresh budgetary support,  the April prices will need to reflect a crude price materially above US$100.

To understand why oil at US$100 hits Zimbabwe harder than virtually any country in the region, the regional price comparison is essential. The table below presents pump prices across southern and eastern Africa using the most recent available data, alongside Zimbabwe's current and pre-crisis prices.

Sources: ZERA (Zimbabwe, March 2026); GlobalPetrolPrices.com

Several structural facts emerge from this comparison. Zimbabwe at US$1.71 per litre for petrol is already the second most expensive fuel market in the SADC region, behind Malawi at US$2.87. It is 61% more expensive than South Africa at US$1.06 and 55% more expensive than Botswana at US$1.10,  both of which also import all their fuel.

It is 44% above the global average of approximately US$1.19 per litre. The differential cannot be explained by logistics alone. South Africa and Botswana source fuel from similar origins, transit similar distances, and face similar ocean freight costs to Zimbabwe.

The explanation lies in Zimbabwe's tax and levy structure. Zimbabwe imposes US$0.52 to US$0.54 per litre in taxes and levies on fuel, approximately 30% of the pump price at current levels. This compares to less than 20% in Botswana and South Africa, approximately 22% in Zambia, and less than 20% in Tanzania.

Zimbabwe's fuel tax take per litre is not just high in percentage terms,  it is high in absolute dollar terms. At US$0.54 per litre, Zimbabwe collects more in fuel tax per litre than South Africa's entire pump price premium over the global average. This tax architecture was defensible when crude was at US$72 per barrel and Zimbabwe's pump prices were already elevated. At US$100 crude and rising, it becomes fiscally indefensible as an economic policy choice.

There is a further structural disadvantage that compounds the regional comparison. Zimbabwe's ethanol blending mandate, which requires E5 (changes with season), to blended fuel rather than pure petrol, was introduced partly to reduce the import fuel bill through domestic production.

But the ethanol blending supply chain, dominated by a few producers, Green Fuel Limited and Trangle has not scaled to the point where it meaningfully cushions the crude oil price impact. The mandate adds compliance costs without delivering the import substitution benefit at sufficient scale.

ZERA reviews fuel prices every two weeks (from previously every month starting February 2023), mechanically applying a formula that incorporates the international crude price, freight costs, port charges, inland transport, and statutory levies. The next review is due approximately 18 March, and a further review will fall around 1 April, with a final April review in mid-month.

Given that Brent is currently trading at US$106–108 and Goldman Sachs has flagged the possibility of US$120–150 if the Hormuz crisis persists, April pricing depends heavily on whether a diplomatic resolution emerges and whether G7 strategic reserve releases provide meaningful price relief.

Equity Axis projections based on crude price to pump price pass-through analysis..

In the base case, Brent holding around US$100–110 through March and April, with G7 strategic reserve releases providing modest relief and no further escalation of the Hormuz closure, Zimbabwe pump prices are projected to reach approximately US$2.00–2.15 per litre for petrol and US$2.05–2.20 for diesel by the April ZERA review cycle.

This assumes the government maintains partial cushioning at a similar absolute level to the March 4 intervention (absorbing approximately US$0.10–0.13 per litre). If cushioning is withdrawn entirely to protect the fiscus, the April prices would be higher.

In the adverse case,  Brent testing US$120–130, consistent with Goldman Sachs' projection if the Hormuz situation persists beyond 30 days without resolution, pump prices could approach US$2.25–2.50 per litre. At US$2.50 per litre, Zimbabwe's petrol price would surpass Malawi, currently the most expensive market in sub-Saharan Africa, and become the highest fuel cost economy in the region by a substantial margin.

The stress case, involving a full and prolonged Hormuz closure with Brent at US$140–150, would push prices to US$2.60–2.80 per litre,  a level at which the macroeconomic spillovers would be severe.

The arithmetic of this trajectory is straightforward and deserves to be stated plainly. Zimbabwe's current petrol price of US$1.71 per litre represents a 9.6% increase from the February level of US$1.56. A move to US$2.15 from US$1.56 would represent a 37.8% cumulative increase in six weeks. A move to US$2.50 would represent a 60.3% increase.

These are not marginal adjustments. In an economy where the informal sector,  more than 80% of economic activity  runs on petrol generators, motorcycles, and kombis, where agricultural irrigation, cold chains, and manufacturing all depend on diesel, and where every input cost has a fuel component, a 37–60% fuel price increase in two months is a supply-side inflationary shock of considerable magnitude.

The distributional consequences of a fuel price shock in Zimbabwe are regressive in ways that formal price indices do not fully capture. The formal inflation measure picks up petrol and diesel directly, and the RBZ estimates that a 20–30% fuel price increase adds 3–5 percentage points to annual inflation. A 40–60% increase, if it materialises, would add considerably more, potentially 6–10 percentage points on the annual inflation rate, at a moment when the RBZ is attempting to consolidate single-digit inflation and the case for holding the Bank Policy Rate at 35% is already contested.

The structural response to a fuel price shock of this magnitude requires two things that Zimbabwe has historically found difficult to do simultaneously, absorbing short-term pain through fiscal measures while accelerating the structural reforms that reduce oil dependency. The fiscal tool, reducing levies temporarily,  is the instrument the government reached for on 4 March.

It is a blunt, expensive, and ultimately limited mechanism. Zimbabwe's fuel levy revenue is not idle. It funds road maintenance, ZINARA obligations, and general fiscus. Reducing it to cushion consumers in a sustained oil price environment creates a structural revenue hole that must be filled elsewhere, typically through money supply growth that directly threatens the disinflation trajectory the RBZ has worked to construct.

The structural alternatives are known but slow. Solar transition, Zimbabwe averages 3,000 sunshine hours per year and a credible national programme could cut the fuel import bill by US$400 million within five years, requires upfront capital at a scale that the current 35% interest rate environment makes prohibitively expensive.

Pipeline and strategic storage infrastructure that would allow Zimbabwe to buy fuel at trough crude prices and release it during price spikes requires investment and institutional capacity that have been discussed but not delivered. Expanding ethanol blending, the one import substitution mechanism already in place, is constrained by 2 producers structure that gives no competitive pressure to scale.

What the government will almost certainly do is a combination of the following, partial levy reduction at the March 18 review, framed as consumer cushioning, appeals to ZERA for measured pass-through over multiple cycles rather than single-cycle full adjustment, and political pressure to hold prices below the market-clearing level for as long as the Hormuz situation remains in the headlines. This is rational crisis management in the short term.

It is not a structural response. And if Brent holds above US$100 for the remainder of Q1 and into Q2, which is the base case at current geopolitical conditions, the accumulated fiscal cost of cushioning will force a reckoning in the April-May budget cycle that cannot be deferred indefinitely.

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