Zimbabwe Hikes Fuel Price over Massive Shortage

Zimbabwe hiked fuel prices on Monday – for the second time in a week – though most pumps remained dry, with no end in sight to shortages that are helping drive inflation rapidly higher.

The Zimbabwe Energy Regulatory Authority said in Harare a litre of petrol would now cost 7.45 Zimbabwe dollars, up 22 per cent from 6.10 dollars. Diesel now costs 7.19 a litre, a 23 per cent rise, Reuters writes.

On July 13, fuel prices were hiked by up to 16 per cent after finance minister Mthuli Ncube said fuel was considerably cheaper than in neighbouring countries. Ncube said he would like to see the price increase to the equivalent of $1 a litre.

With inflation soaring, economic analysts say increases in fuel prices are adding to price pressures, especially as rolling electricity cuts are forcing businesses to use expensive diesel generators to power their operations.

Diesel and petrol prices have gone up by 456 per cent this year, in line with a slide in the value of the local RTGS currency, renamed the Zimbabwe dollar last month.

The biggest fuel price hike in January, a 150 per cent increase, triggered violent protests in Harare and other cities.

The Zimbabwe dollar was trading on Monday at 8.88 against the greenback on the official interbank market, while on the black market, $1 fetched 10.5 Zimbabwe dollars.

The country continues to battle with the problems of unemployment and inflation that precipitated the ouster of longtime leader Robert Mugabe.

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