Zimbabwe considers raising ethanol blend from E5 to E20

Zimbabwe's Cabinet has approved a review of selected, time-bound fuel taxes in an effort to contain rising costs and ease pressure on consumers, as global oil market disruptions linked to the Middle East continue to filter into the domestic economy.

The decision comes amid recent increases in local fuel prices, with petrol and diesel now retailing at US$2.17 and US$2.05 per litre respectively. Authorities say the adjustments are a response to external supply shocks that have begun to affect transport costs and broader inflation trends.

In its post-Cabinet briefing, the Government said the measures are aimed at protecting consumer welfare while maintaining macroeconomic stability.

"Cabinet considered and approved the review of selected and time-bound fuel taxes in order to contain inflationary pressures and safeguard consumer welfare," the statement noted.

While most basic commodity prices have remained stable, Cabinet acknowledged emerging pressures in certain sectors. Essential goods such as mealie-meal, cooking oil, sugar, rice, and dairy products have largely held steady, although some bread producers have increased prices by an average of 10 percent.

Transport costs have also begun to rise, with passenger operators adjusting fares in response to higher fuel costs, adding further pressure on households.

As part of its broader energy response strategy, Government is also considering increasing ethanol blending in petrol from the current E5 level to E20. The move is expected to help reduce pump prices and improve fuel affordability in the local market.

"Government also considered the option of increasing the ethanol blending of petrol from the current E5 to E20 level with a view to reducing the pump price of petrol," the statement said.

Authorities indicated that the policy options are still being refined, with detailed announcements on fuel pricing and tax adjustments expected in due course.

The measures form part of a wider effort by Government to cushion the economy from external shocks while maintaining price stability and ensuring continued access to essential goods and services.