Government hikes fuel price by up to 80 percent

Prices of fuel in Zimbabwe shot up on Tuesday by between 51 percent and 82 percent, state television reported. Petrol went up by 74 percent to US $1.38 while diesel rose over 67 percent to US $1.20 dollars. The state-owned National Oil Company of Zimbabwe (NOZCIM) blamed the increases on the rise of international market prices, the instability of Zimbabwe’s exchange rate and the increase of operational costs such as freight charges.

Higher fuel prices sent fares on public transport up by 50 percent on Wednesday, forcing many urban workers to walk to their jobs. The expense is an enormous burden for urban workers, whose average wages are about US $50 a month. The opposition Movement for Democratic Change (MDC) slammed the latest hike, calling it “a damning admission of failure by the ZANU-PF government.”

The party warned that “it won’t be long before the increased fuel prices trigger an upward spiral in the prices of food and all consumer products.”

Zimbabwe, which imports all its petroleum products, is facing an acute shortage of foreign exchange and has experienced a fuel shortage since December 1999. Zimbabwe last raised fuel prices in November last year. The latest increase means fuel prices have tripled over the last 18 months. The country is suffering its worst-ever economic crisis, marked by declining real incomes, unemployment and inflation rates of about 60 percent, and a chronic shortage of foreign currency. “I think the cost of this fuel rise is going to be very high socially, politically and economically,” said Brian Raftopoulos, a political analyst at the Zimbabwe Institute of Development Studies.