HARARE – Zimbabwe and it’s southern neighbour, South Africa, have resolved to increase fuel prices in tandem as Brent Crude prices and exchange rate movements move against their favour. Benchmark Crude Oil gained 4.51% from US$48.79 per barrel on the seventh of December 2020 to US$50.99 on the fifth of January 2021.

This saw the Zimbabwe Energy Regulatory Authority (ZERA) adjust it’s pump prices on Tuesday with immediate effect. Diesel 50 was up 3.77% (the most of any category) and 3.36% in the local and USD terms. It increased to $100.91 per litre from $97.24 and US$1.23 from US$1.19 in both currencies.

Petrol also saw significant increases in prices as it was up 1.96% and 1.68% in local and USD terms, respectively. Blend moved from $97.44 to $99.35 and US$1.19 to US$1.21 in both currencies.

The increases came a day after South Africa had issued a statement on fuel increases effective 6 January 2021. South Africa’s Department of Energy announced fuel adjustments which will see all grades of fuel price increases, with petrol climbing between 40 cents and 43 cents per litre, and diesel increasing by 54 and 55 cents per litre.

The movement in prices is affected by two main factors – international petroleum costs, and the movement in the rand/dollar exchange rate.

The average rand/US dollar exchange rate for the period 27 November 2020 to 30 December 2020 was 14.9391 compared to 15.6305 during the previous period. This led to a lower contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin by 24.19 c/l, 25.00 c/l and 24.30 c/l respectively.

However, this was completely undone by the movement in international oil prices, which contributed to higher international petroleum product costs of between 65 cents per litre and 80 cents per litre for petrol and diesel, respectively.

Zambia despite crying for fuel price increments four weeks ago, went on and kept fuel prices unchanged earlier in the new year.