Source: Consumers get relief as Government slashes fuel prices – herald
Zimpapers Reporter
CONSUMERS yesterday heaved a sigh of relief after the Government slashed fuel prices, easing pressure on households and businesses following weeks of rising costs driven by conflict in the Middle East.
The Zimbabwe Energy Regulatory Authority (ZERA) announced on Friday that the price of blended petrol (E20) has been reduced to US$2,08 per litre from US$2,23, while diesel is now pegged at US$2,09 per litre, down from US$2,11.
The reductions also apply in local currency terms, with petrol now selling at ZiG52,37 per litre and diesel at ZiG52,63 per litre.
ZERA attributed the drop in petrol prices largely to an increase in ethanol blending levels from E5 to E20, a shift that has significantly lowered the cost of blended fuel.
“Since the last few months when volatility of fuel supply began, Government prioritised security of supplies through market-sensitive pricing and reduction of taxes to cushion consumers and the economy at large,” said ZERA in a statement.
“The price of blend has also been reduced by the significant increase in the blending levels from E5 to E20.”
Ethanol blending involves mixing petrol with locally produced ethanol, which is generally cheaper than imported refined fuel.
Under the previous E5 regime, petrol contained just 5 percent ethanol and 95 percent imported fuel.
The shift to E20 means 20 percent of the fuel is now ethanol, significantly reducing the volume of costly imports required.
Because ethanol is produced domestically, largely from sugarcane, it is less exposed to international oil price fluctuations and foreign currency costs.
Increasing the proportion of ethanol, therefore, lowers the overall pump price while also reducing pressure on foreign currency reserves.
Global pressures begin to ease
The latest price cut comes after Zimbabwe experienced successive fuel price increases in recent weeks, triggered by rising global crude oil prices amid escalating tensions in the Middle East after the United States-Israel war of aggression on Iran.
At the height of the tensions, fears of supply disruptions — particularly around the strategic Strait of Hormuz, a key global oil transit route — pushed international oil prices sharply upwards, increasing import costs for countries like Zimbabwe.
However, developments on Friday, including Iran’s announcement of the temporary reopening of the Strait of Hormuz, helped calm markets, leading to a decline in global oil prices to around US$90 per barrel.
However, Tehran announced the closure of the strait once again yesterday, citing the US’ continued blockade.
The easing of geopolitical tensions has raised cautious optimism that fuel prices could stabilise or even decline further if the current situation holds.
Deputy Chief Secretary in the Office of the President and Cabinet (Presidential Communications) Mr George Charamba said the latest fuel price reduction was part of broader Government efforts to cushion consumers.
He said the fuel price cut had been approved by President Mnangagwa.
Writing on X, Mr Charamba said: “His Excellency the President has sanctioned a downward fuel review, with petrol enjoying the larger reduction. Diesel prices had already benefitted from the removal of a raft of taxes a couple of weeks ago.”
Last month, President Mnangagwa established a high-level inter-ministerial committee, chaired by Chief Secretary in the Office of the President and Cabinet Dr Martin Rushwaya, to develop urgent measures to mitigate the impact of rising fuel costs on households and industry.
Despite recent volatility, ZERA said the country has sufficient fuel reserves.
“Members of the public are advised not to engage in any panic buying or hoarding as the country is assured of adequate stocks for a period spanning over three months.
“On its part, the Zimbabwe Energy Regulatory Authority will closely monitor the situation and take the necessary steps in the two weeks within which the prices are effective.”
ZERA added that the authorities will continue to rely on market-based pricing while introducing targeted interventions to cushion consumers.
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