HARARE – Following the recent 26 percent fuel price increases by the Zimbabwe Energy Regulatory Authority, fuel supplies across the country have grinded to a halt. The situation, which was triggered by ZERA’s failure to factor in the delivery cost to its new fuel prices, has left the country with no fuel at most fuel stations.
A market analysis conducted by ENN correspondent Carol Mvundura in Harare on Wednesday identified desperate motorists already queuing at service stations that did not even have fuel in anticipation of deliveries. Oil companies have refused to deliver fuel to outlets at a loss owing to this alleged error of omission by the regulator. Following the new price increases, a litre of petrol now costs ZWL$9.01 with diesel costing ZWL$9.06 respectively. Assuming the deadlock between oil companies and the regulator is addressed by factoring in delivery costs, fuel prices in Zimbabwe are likely to go up again within the coming days. It is anticipated that a deal between the regulator and oil companies on the contentious issue of fuel delivery costs would be addressed today to avert an imminent cessation of the country’s transport system.
Fuel prices have been increased by more than 500% this year alone as the value of the local currency slides on the official and parallel markets, and prices of basic commodities continue to soar beyond the reach of many. With an annual inflation of 176% recorded in June 2019, a figure that is disputed by inflation expert Steve Hanke who puts it at 570%, Zimbabwe’s economy is on the brink.
Zimbabwe has an estimated national population of 16 million and an estimated average of 114 motor vehicles per thousand people, according to the 2007 World Bank collection of development indicators, compiled from officially recognized sources. This prudentially implies that Zimbabwe requires fuel to move almost 2 million vehicles and to light up industries and homes in the wake of massive power cuts that have left the country with only 6 hours of electricity availability per day. The halt in fuel deliveries started last Friday and has huge implications to business as industries fail to supplement their energy requirements with gasoline. Confronted by energy shortages at a time electricity tariffs shot up by 500% for businesses and fuel is up 26%, Zimbabwe’s challenges are still far from over.
With latest news filtering that Zimbabwe Energy Minister Fortune Chasi has reached an agreement with ESKOM of South Africa to resume power supply to Zimbabwe, but only when South Africa has enough electricity and Zimbabwe puts up guarantees, it is every Zimbabwean’s hope that the situation works for the best of Zimbabwe, but the question is, as is the case with ZERA and Oil Companies, with a plethora of economic challenges unfolding, will Zimbabwe uphold its contractual obligation to Eskom?