Zimbabwe's fuel prices rise by 150%

Zimbabwe's fuel prices rise by 150%

The price of petrol and diesel in Zimbabwe is to more than double with immediate effect, the country's energy regulatory authority has announced. The increase of 150% comes a day after the Zimbabwean dollar fell by more than 50% against international currencies.

This happened after the central bank removed a fixed currency exchange rate in place since March, and introduced a weekly foreign exchange auction.

Zimbabwe has been plagued by fuel shortages for years, compounded by a lack of foreign currency. In January 2019, violent protests broke out when fuel hikes of more than 120% were introduced.

The state crackdown at the time left more than a dozen people dead.

Genesis to a rising fuel price

In 2019, several people were killed during protests in Zimbabwe after the government more than doubled the price of fuel overnight. Hundreds more were arrested as demonstrators took to the streets in the cities of Harare and Bulawayo.

Burning tyres were seen to barricade roads and block bus routes accompanied belligerence over hike in fuel prices. In the midst of all this, President Emmerson Mnangagwa said the fuel price rise was aimed at tackling shortages caused by an increase in fuel use and "rampant" illegal trading.

At the time, Zimbabwe's government said that it was trying to resuscitate the country's struggling economy and as a result, inflation rose to staggering height while wages plummeted.  The southern African nation faced a severe shortage of US dollar cash and confidence in its bond notes, which was supposed to be worth the same as the dollar, became low.

The bond notes, or "bollars", lost value because of a lack of foreign currency backing the note, and are now worth much less than a dollar.

Zimbabwean companies also wasn’t producing enough to satisfy local demand or to earn foreign currency by exporting goods. Instead, the country was importing more than it was exporting and struggled to pay.

Mr. Mnangagwa came to power in November 2017 after long-time ruler Robert Mugabe resigned following a military takeover and mass demonstrations.

He won a controversial poll last year that was marred by violence and claims of election rigging. In a televised address, President Mnangagwa said the fuel price hike would address the ongoing fuel problems, which have saw motorists queuing for hours at petrol stations.

He said the government would crackdown on "elements bent on taking advantage of the current fuel shortages to cause and sponsor unrest and instability in the country".

The hike means petrol prices rose from $1.24 (£0.97) a liter to $3.31, with diesel up from $1.36 a liter to $3.11.

Currently, however, the price of petrol has risen by 150%.

Source:BBC