HomeLocal NewsFuel price hike spikes cost of living

Fuel price hike spikes cost of living

INDUSTRY is sweating over a recent sharp increase in fuel prices in United States dollars which has triggered a spike in production costs, precipitating an unbearably high cost of living for consumers.

The Zimbabwe Energy Regulatory Authority (Zera) over the past week announced new fuel prices. This left industrial quaking as cost production spiked.

Resultantly, prices of basic commodities in US dollars are increasing just like what has been happening in local currency.

Zera noted that the increase in fuel prices was justified due to the Russia-Ukraine conflict in eastern Europe.

Industry which is already battling high cost of production due to expensive electricity and an unfriendly tax regime, is smarting from fuel price increases.

The fuel price is now pegged at US$1,67 per litre for petrol, an increase from US$1,51 announced at the weekend.

Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza said the Ukraine-Russia war came at a time when the country was still recovering from the Covid-19 pandemic. This has worsened the country’s already precarious situation.

“The recent outbreak of war in Ukraine is coming on the heels of the health pandemic that has impacted the global economy. These events do not bode well for Zimbabwe’s economic recovery.

“Global inflation has been ticking up and now with oil over US$130 per barrel, it is a bonfire for inflation. Most of Zimbabwe’s fertiliser and fertiliser products come from Eastern Europe (Ukraine); naturally this will impact Zimbabwe,” Matsheza said in an interview on Tuesday.

“For Zimbabwe, the focus should be on other sectors that are seeing upward swings in prices, like gold, iron ore. The exploitation of the Muzarabani basin becomes an imperative, to try and pivot away from global supplies,” he added.

Zimbabwe National Chamber Of Commerce (ZNCC) chief executive officer Christopher Mugaga bemoaned the current situation citing that industry cannot take another hike as they have barely recovered from the ravages of the Covid-19 pandemic.

“They cannot raise the price of fuel, as we are still recovering from the devastating effects of Covid-19 and its restrictions,” he said.

The current fuel increase will lead to widespread price increases by retailers.

Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu said consumers must brace for a worse economic landscape worsened by the impact of the Russia-Ukraine war. The war is only in its 13th day, consumers should brace for price escalations, not of our own making, but direct and indirect war effects,” he said.

“Basic and non-essential goods will jump as fuel and gas prices shoot against declined supply. Air and sea cargo fees have risen sharply.”

Fuel prices have been a thorny issue in the country since 2019 when a price change triggered massive protests, during which eight people were killed and  200 injured.

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