Wednesday, August 09, 2006

Fuel prices increase

Fuel prices in Zimbabwe have gone up by as much as 150% in the wake of the central bank's 60% devaluation and redenomination of the currency last week and the start of issuance of new banknotes which has created widespread confusion and doubt.
Most stations in Harare and Bulawayo had no fuel. But those with gasoline or diesel to sell were demanding $Z650 a liter – about US$2.60 - compared with $Z400 dollars in the days before the currency overhaul was launched. But given the shortages, some dealers in the parallel market were demanding Z$1,000 (US$4) per liter of gasoline.
Industry and Trade Minister Obert Mpofu said price gougers would be prosecuted. But commuters complained that police turned a blind eye to operators hiking fares. Long queues are also emerging in the capital as a result of the fuel shortages.
Economists say the devaluation and higher taxes on fuel announced by the Ministry of Finance in its recent supplementary budget made such price increases inevitable.
Omnibus operators have raised fares by more than 60%, defying a government freeze of prices through August 21, the central bank's deadline for currency conversion.

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