Price of Gasoline in Zimbabwe Nearly Doubles

Tendai Maphosa
Voice of America
Raleigh, North Carolina
February 26, 2003

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Zimbabwe's government has nearly doubled the price of gasoline and quadrupled the price of jet fuel. Officials say the move is designed to increase imports, but the immediate impact will be on already hard-pressed consumers.

Minister of Energy and Power Development Amos Midzi made the announcement Tuesday, saying the move comes in response to international increases in the price of fuel and transport. The price increases went into effect immediately.

The highest increase is in the price of jet fuel, which rose from about $1 to more than $4 per liter. While this should lead to a substantial increase in air travel costs, what is going to affect the majority of Zimbabweans are the increases in the prices of gasoline, diesel, and illuminating paraffin.

In a country without a public transport system, the new higher pump price of gasoline and diesel will have an immediate impact on commuters, who are already struggling to cope with prices.

The price of paraffin, which is used by most Zimbabweans in the lower-income bracket for illumination and cooking, rose by 20 percent.

Zimbabwe has been experiencing serious fuel shortages for the past three years because all its fuel is imported and the country does not have enough foreign currency to meet its requirements.

Zimbabwe's fuel, which is heavily subsidized, is the cheapest in the southern African region. The government hopes the price hike will encourage oil companies to import fuel and sell it at the higher prices. But analysts say even the new prices fall far below the import price, and companies are not likely to import fuel if they can not make a profit.

At the same time, the increases will have a significant effect on inflation, which stands at more than 200 percent.

Economist John Robertson says average Zimbabweans will have to work harder to meet their daily needs, and will press their employers for higher salaries.

Zimbabwe is going through its worst economic crisis since independence 22 years ago.

The situation has been worsened by a food shortage caused by drought and, according to international aid agencies, President Mugabe's troubled land reform program. White commercial farmers lost their land to make way for landless blacks, but due to inexperience and a lack of resources, most of the new black farmers have not been able to cultivate their land.