Fuel prices hiked

Fuel prices have been adjusted slightly upwards to $97,93c for petrol and $83,36 for diesel, the Zimbabwe Energy Regulatory Authority (ZERA) announced last night, while US dollar maximum prices have been reduced to US1,18 for petrol and US$1,04 for diesel.

All prices are based on the land cost, in US dollars, of petrol and diesel followed by formulas that take into account taxes, transport costs, mark-ups and the cost of ethanol being blended with petrol along with the exchange rate when setting maximum local prices.

US dollar prices tend to move, in this case downwards, as a result of changes in international oil, refining and shipping costs.

Those changes also affect local currency prices, but the exchange rate has had a significant effect until the middle of last month when the auction started producing very small weekly changes. The prices had last been adjusted on August 5 to $83,36 for diesel and $93,15 for petrol.

There was one more modest step in the exchange rate after that date, with the changes since mid-August being trivial.

Forex prices on August 5 were US$1,09 for diesel and US$1,28 for petrol.

Zera says operators may sell at below the cap depending on their trading advantages.

In recent weeks, many service stations have been quoting US dollar prices below the minimum as competition in that segment of the market continues to build up.

Already, some fuel dealers were selling petrol at between US$1 and US$1,17 while diesel was retailing at between US$0,88c and US$1,09.