Harare – Fuel now constitutes 56% of a vehicle’s operating costs in Zimbabwe, an industry report has confirmed. This development comes as the Zimbabwe Energy Regulatory Authority has been adjusting fuel prices upwards on a weekly basis, adding more financial pressure on struggling businesses and consumers, ENN reports. On 14 January 2019, fuel protests erupted across Zimbabwe and lasted for three days after Government imposed a 130% price increase on fuel which made Zimbabwe’s fuel the most expensive in the world at that time. Government responded with a crackdown, resulting in injuries, multiple arrests and death of protestors and innocent citizens.

The price of diesel rose from US$1.38 to US$3.11 per litre and that of petrol from US$1.43 to US$3.31 per litre. At that time, Zimbabwe’s surrogate currency in bond notes and RTGS values was pegged at par with the United States dollar. Today, just nine months after liberalising its exchange rate and reintroducing its Zimbabwean dollar, a litre of diesel now costs ZWL$17.74 whilst petrol is costing ZWL$17.07 per litre respectively.

According to the Automobile Association of Zimbabwe’s (AAZ) revised November 2019 estimated vehicle operating costs report, it now costs ZWL$2.33 for a light vehicle of up to 1500cc engine capacity to travel for one kilometre. Luxury vehicles of above 3000cc engine capacity now churn ZWL$4.87 in operating costs for every kilometre travelled. This indicates a 14 percent month-on-month increase from October 2019’s vehicle operating costs. 

Considering that civil servants’ salaries have remained almost stagnant since the liberalisation of the exchange rate, fuel costs in Zimbabwe have gone up by 1,185 percent since 1 January 2019 and by 470 percent if we use the new fuel prices announced by Government on 12 January 2019.  The fuel cost alone has priced many formal employees out of the convenience of their motor vehicles at a time illegal foreign currency dealers and informal traders in Zimbabwe are affording to buy, drive and maintain expensive vehicles, putting to doubt the impact of the Zimbabwe government’s efforts in formalising business operations and eradicating corruption.

Advertisement

With most schools in Zimbabwe hiking school fees for the coming year by up to 400 percent at a time fuel prices continue to go up and salary movements remain way below the inflation curve, the Zimbabwe government has created a time bomb for its civil servants and citizens who will no longer afford to run a motor vehicle, above their failure to afford private medical facilities and three basic meals per day. Urgent holistic economic interventions are needed in Zimbabwe to avoid a repeat of January 2019 when economic pressures of the fuel increase led to a costly mass protest for the struggling nation.