The bad news on a local filling station prices board
On Wednesday morning the previous day’s rumour of fuel price increase was proven correct. Diesel price had gone up from $1.53 per litre to $1.77. Please note that is US dollars not the local ZWG dollar which despite being an official and rate-controlled currency nobody wants it, most certainly not the fuel stations.
The reason given for the price increase is the ongoing war in Iran. I suspect that it’s a convenient excuse to bleed the Zimbabwean public of yet more money. Yes, the increase in crude oil price is going to cause a knock-on effect to the pump prices but nearly 16%? What does the government think the knock on to cost of living is going to be? Do they care? Will it come down if or when the fuel prices are reduced? Not a chance!
Being a landlocked country all imports of consequence come in by road or rail. A telling exception is the fuel pipeline from the Mozambique port of Beira to Mutare, a city on the eastern border of Zimbabwe, which accounts for some 90% of fuel imports. This means that oil price increases are going to have a minimal effect on pump costs. This doesn’t seem to have been incorporated into the ZERA (Zimbabwe Energy Regulatory Authority) calculation of how the maximum allowable fuel price arrived at. ZERA is the government body that regulates maximum fuel prices – I am not sure what else it does if anything.
The ZERA attempt at legitimizing the fuel price increase falls short of convincing
More tellingly there is no indication of how much the source price has changed so it is effectively meaningless. The government has lost no time in telling us just how lucky we have been that it didn’t increase more (last paragraph in italics below):
“The petroleum prices are with immediate effect from 4 March 2026 for the next two weeks. In the meantime, ZERA will be closely monitoring the market developments to ensure that there is adequate supply in the market.
“The above prices are as a result of Government reducing some of its charges to cushion the consumers from astronomical increases that have happened from changes in the international market.
“Without Government cushioning, the actual prices would have been US$1.90/litre for diesel and US$1.81/litre for blend.”
This is from a government that has imposed taxes on bank transfers of 2% (some are exempt such as pensions), 2% tax on cash withdrawals from banks and a VAT of 15.5% that has just gone up from 15%. Income is taxed starting at $100 per month. Foreign currency transactions by debit card now attract a 15% tax. This is a government desperate for cash.
The shortage of cash is evident in the public sector. The road from Bulawayo to Victoria Falls is nearly impassable in places. There are lots of others. Talking to a friend who lives in the eastern highlands area of Nyanga she tells me that it takes her an hour to go 7km along a road that became impassable in January due to heavy rains and other stuck vehicles. Roads in our suburb of Mount Pleasant can require a good deal of patience to negotiate and the problem is widespread in Harare. Power outages and poor voltage are endemic and municipal water is erratic and at best a trickle (ours goes into the swimming pool for storage). What was once the pristine central business district of Harare is now the proverbial dog’s breakfast of rubbish, potholes, vendors and a bad smell to boot.
The tax department works! It’s had a complete makeover in the last year or so and nearly everything is doable online. That’s including the notorious QPDs (Quarterly Payment Due) whereby one has to estimate the company profit or loss four times a year with penalties enforced for being inaccurate. Yes, you got it – taxed in advance!
Businesses eligible to charge VAT have to have a computerised point-of-sale that is linked to the tax department’s computer system and every invoice or cash sale has a QR code on it. Scan the QR code and you can see a representation of the invoice. Try it on the example. I have to admit that I’m impressed.
A typical invoice from a VAT registered company
So when the government hikes the fuel price by nearly 16% and tells us that it could have been more I am sceptical (I am already cynical).
Postscript: In the time taken to write this blog fuel pump prices have rocketed the world over. The Zimbabwe government might just have to rescind its decision to “cushion” price increases. So far there haven’t been reports of fuel shortages but the bulk diesel price on the sign pictured is now zero – none to be had.
Zimbabwe Absurdity
Panic, greed or both?
11 03 2026On Wednesday morning the previous day’s rumour of fuel price increase was proven correct. Diesel price had gone up from $1.53 per litre to $1.77. Please note that is US dollars not the local ZWG dollar which despite being an official and rate-controlled currency nobody wants it, most certainly not the fuel stations.
The reason given for the price increase is the ongoing war in Iran. I suspect that it’s a convenient excuse to bleed the Zimbabwean public of yet more money. Yes, the increase in crude oil price is going to cause a knock-on effect to the pump prices but nearly 16%? What does the government think the knock on to cost of living is going to be? Do they care? Will it come down if or when the fuel prices are reduced? Not a chance!
Being a landlocked country all imports of consequence come in by road or rail. A telling exception is the fuel pipeline from the Mozambique port of Beira to Mutare, a city on the eastern border of Zimbabwe, which accounts for some 90% of fuel imports. This means that oil price increases are going to have a minimal effect on pump costs. This doesn’t seem to have been incorporated into the ZERA (Zimbabwe Energy Regulatory Authority) calculation of how the maximum allowable fuel price arrived at. ZERA is the government body that regulates maximum fuel prices – I am not sure what else it does if anything.
More tellingly there is no indication of how much the source price has changed so it is effectively meaningless. The government has lost no time in telling us just how lucky we have been that it didn’t increase more (last paragraph in italics below):
“The petroleum prices are with immediate effect from 4 March 2026 for the next two weeks. In the meantime, ZERA will be closely monitoring the market developments to ensure that there is adequate supply in the market.
“The above prices are as a result of Government reducing some of its charges to cushion the consumers from astronomical increases that have happened from changes in the international market.
“Without Government cushioning, the actual prices would have been US$1.90/litre for diesel and US$1.81/litre for blend.”
This is from a government that has imposed taxes on bank transfers of 2% (some are exempt such as pensions), 2% tax on cash withdrawals from banks and a VAT of 15.5% that has just gone up from 15%. Income is taxed starting at $100 per month. Foreign currency transactions by debit card now attract a 15% tax. This is a government desperate for cash.
The shortage of cash is evident in the public sector. The road from Bulawayo to Victoria Falls is nearly impassable in places. There are lots of others. Talking to a friend who lives in the eastern highlands area of Nyanga she tells me that it takes her an hour to go 7km along a road that became impassable in January due to heavy rains and other stuck vehicles. Roads in our suburb of Mount Pleasant can require a good deal of patience to negotiate and the problem is widespread in Harare. Power outages and poor voltage are endemic and municipal water is erratic and at best a trickle (ours goes into the swimming pool for storage). What was once the pristine central business district of Harare is now the proverbial dog’s breakfast of rubbish, potholes, vendors and a bad smell to boot.
The tax department works! It’s had a complete makeover in the last year or so and nearly everything is doable online. That’s including the notorious QPDs (Quarterly Payment Due) whereby one has to estimate the company profit or loss four times a year with penalties enforced for being inaccurate. Yes, you got it – taxed in advance!
Businesses eligible to charge VAT have to have a computerised point-of-sale that is linked to the tax department’s computer system and every invoice or cash sale has a QR code on it. Scan the QR code and you can see a representation of the invoice. Try it on the example. I have to admit that I’m impressed.
So when the government hikes the fuel price by nearly 16% and tells us that it could have been more I am sceptical (I am already cynical).
Postscript: In the time taken to write this blog fuel pump prices have rocketed the world over. The Zimbabwe government might just have to rescind its decision to “cushion” price increases. So far there haven’t been reports of fuel shortages but the bulk diesel price on the sign pictured is now zero – none to be had.
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Tags: cost of living, crude oil, fuel prices, fuel shortage, income tax return, invoice, Iran war, pump price, tax clearance, VAT, Zimbabwe Government
Categories : Business, News & Various, Social commentary