Movement In Exchange Rate & Duties Necessitated Fuel Price Increase - ZERA
The Zimbabwe Energy Regulatory Authority (ZERA) says the recent fuel price increase was in response to the movement in the exchange rate and duties.
Last month the Reserve Bank of Zimbabwe (RBZ) suspended the the ‘managed floating exchange’ model and adopted a fixed exchange rate system pegged at the interbank rate of ZW$25 to the US dollar.
On Tuesday, ZERA acting chief executive officer Eddington Mazambani told The Herald that when the new prices are considered in US dollars, they are in fact lower than the previous prices. Said Mazambani:
The causes of the increase in the exchange rate. Remember our previous price was pegged at ZWL$18,42 and now we have got an exchange rate of ZWL$25 to the dollar (United States) and then duty on petrol.
And duty, when we had the previous price regime (before the latest price adjustment), it was ZWL$4,26 for diesel, ZWL$4,44 for petrol, it’s now ZWL$5,82 diesel and ZWL$7,28 for petrol.
ZERA increased the price of diesel and petrol on 5 April 2020 to ZWL$21.52 for and ZWL$21.77 for petrol per litre.
Meanwhile, crude oil prices have plummeted to US$20 per barrel, which is the lowest since 2002, on the back of low demand due to a global lockdown in response to the novel coronavirus outbreak.
