HARARE – Zimbabwe’s cabinet on Tuesday approved a review of selected fuel taxes as authorities scramble to contain rising costs triggered by global oil market disruptions linked to the Iran war.
Ministers said they were responding to mounting pressure on fuel and transport costs while trying to keep broader inflation in check, following recent price increases to US$2.17 per litre for petrol, up from $1.52 in February, and US$2.05 for diesel, up from $1.56.
Finance minister Mthuli Ncube told a post-cabinet media briefing that part of the strategy to lower fuel prices includes revising ethanol blending ratios.
“We also considered the option of increasing the ethanol blending of petrol from the current E5 to E20 level with a view to reducing the pump price of petrol in the local market,” Ncube said.
“Appropriate refinements of the options are underway, and the necessary fuel price adjustments will be communicated in due course.”
Information minister Jenfan Muswere said cabinet had approved “the review of selected and time-bound fuel taxes in order to contain inflationary pressures and safeguard consumer welfare.”
Of the $2.17 motorists currently pay for a litre of petrol, nearly 86 cents goes to various government taxes.
While the government says Zimbabwe has about three months’ worth of fuel reserves bought at earlier prices, the Zimbabwe Energy Regulatory Authority (ZERA) sets pump prices based on current import costs to ensure suppliers remain viable.
Authorities insist most basic commodity prices have remained stable, but pressure is beginning to show in key sectors.
“Most businesses have not increased the prices of basic goods such as mealie-meal, laundry soap, cooking oil, sugar, flour, rice, bath soap, washing powder, powdered or fresh milk, eggs, beef, chicken and salt,” industry minister Mangaliso Ndlovu said.
However, cabinet acknowledged emerging increases.
“A few bread makers increased prices by an average of 10 percent,” Ndlovu noted.
“Price hikes have also been witnessed in the transport sector, in particular by passenger vehicle operators.” – ZimLive
