Basic goods prices set to keep rising amid fuel hikes

Prices of basic goods, services, and transport are expected to continue rising in the coming months following another increase in fuel prices, according to a new food security outlook.

The latest adjustment by the Zimbabwe Energy Regulatory Authority (ZERA) saw petrol rise to US$2.23 per litre from US$2.17, while diesel increased to US$2.11 from US$2.05.

Authorities attributed the upward review to global oil market disruptions linked to geopolitical tensions involving the United States, Israel, and Iran, which have reportedly pushed up international crude oil and transport costs.

However, analysts argue that domestic cost structures are playing a larger role in keeping fuel prices elevated, despite partial tax removals and regulatory adjustments.

The Famine Early Warning Systems Network (FEWS NET) said the fuel increases have already triggered ripple effects across the economy.

"Public transport fares immediately increased by between 50% and 100%," the report noted, adding that production and logistics costs have also risen due to fuel's central role in the supply chain.

The report further observed that bread prices rose by about 10% in the same period, reflecting early pass-through effects of higher transport and production costs.

Zimbabwe's inflation rate, according to the Zimbabwe National Statistics Agency (ZIMSTAT), recorded a slight uptick of 0.4% between February and March, reversing months of relative stability.

FEWS NET warned that continued fuel pressures are likely to erode household purchasing power, particularly among low-income groups, with knock-on effects expected across food and essential commodity markets.

It also flagged potential fertiliser shortages and price increases, which could affect agricultural output and food availability in the short term.

Although government has removed several levies — including excise duty, the Zimbabwe National Road Administration levy, carbon tax, and strategic reserve charges — analysts say structural cost components such as free-on-board charges remain a significant driver of high fuel prices.

They have called for a deeper review of fuel import pricing mechanisms, arguing that external global shocks alone do not fully explain the sustained high pump prices in the country.