Confusion in Zimbabwe: Fuel prices increased. But not really. Well, maybeChristian Fernsby ▼ | May 22, 2019
The Zimbabwe Energy Regulatory Authority (ZERA) on Tuesday disowned an earlier statement which said fuel prices had not increased following the removal of a fuel import subsidy.
Africa ZERA confirmed fuel price increases
In the second notice addressed to fuel service stations, ZERA confirmed fuel price increases with effect from Tuesday.
The maximum pump price for diesel is now 4.89 RTGS per liter, up from 3.22 RTGS dollars per liter, while that of petrol is now 4.97 RTGS dollars, up from 3.36 RTGS dollars per liter.
However, an earlier statement purported to have been issued by Mazambani and which had been quoted by a cross section of the local media warned fuel dealers to stick to the old prices.
With the subsidy, the 1:1 exchange rate between the U.S. dollar and the RTGS dollar was being used to import fuel into the country. Oil companies had remained using the subsidized exchange rate after the RBZ introduced the interbank foreign exchange market in February as it discarded the 1:1 exchange rate which was no longer sustainable as parallel market rates peaked.
In a statement on Monday, RBZ governor John Mangudya said all oil companies would from Tuesday start to use the interbank exchange rate to import fuel.
"There shall be only one foreign exchange rate to be used in the market for the importation of all goods and services. This means that the 1:1 exchange rate that was being used by oil marketing companies for the procurement of fuel will be discontinued with immediate effect," RBZ governor John Mangudya said.
He said the new position was necessary to promote the efficient use of foreign exchange and minimize and guard against incidences of arbitrage within the economy.
Mangudya said as previously announced, the RBZ was proceeding to make a drawdown of 500 million U.S. dollars from an offshore line of credit to supplement the country's foreign exchange receipts and support the interbank foreign exchange market.
"The facility will be disbursed into the economy through the interbank foreign exchange framework at the prevailing interbank foreign exchange rate on a willing-seller willing-buyer basis," Mangudya said. ■