Another fuel hike looms

Rising procurement costs triggered by high crude oil prices, a weakening Zimbabwean dollar and the rising debt of the country’s procurement agency, the National Oil Company of Zimbabwe (NOCZIM), could force another increase in the prices of fuel before the end of the year, the ‘Financial Gazette’ reported on Thursday.

NOCZIM owed international fuel suppliers more than US $89 million while last month it received only US $24.9 million from foreign currency account holders, which was inadequate to offset the funds owed to its foreign creditors. The Zimbabwean dollar, which was devalued by 24 percent on 1 August, has already depreciated twice by a total of 3.6 percent since the government raised fuel prices by up to 101 percent at the beginning of the month. The report added that world crude prices, which this week hit US $32.40 a barrel in London and US $34.28 in New York, have reached 10-year highs and are expected to rise further before the end of the year.