Johnson Progress

Zimbabwe has increased fuel prices for the second time in March, with diesel now selling at US$2.05 per litre and petrol at US$2.17, as the ongoing conflict involving Iran, Israel, and the United States disrupts global supply chains.

The Zimbabwe Energy Regulatory Authority (ZERA) announced the price adjustments, attributing the hike to mounting cost pressures on the international market.

According to the regulator, the new prices which also translate to ZWG52.19 for diesel and ZWG55.13 for petrol in the local currency are necessary to maintain a steady supply and prevent market distortions.

Explaining the rationale behind the decision, ZERA stated that the energy sector is facing significant headwinds from global developments.

“While Government ensures security of fuel supply, ZERA notes that cost pressures are piling up and these require that prices be reviewed for two weeks to avoid fuel shortages and arbitrage,” the authority said in a statement.

The latest increase is directly linked to escalating tensions in the Middle East.

Describing the cause of the volatility, ZERA noted that the ongoing Iran–Israel–United States conflict has constrained key supply routes.

This has driven up import costs for fuel-dependent economies like Zimbabwe, which relies heavily on foreign petroleum products.

Despite the price hikes, the government moved quickly to assure the public that there is no immediate threat of shortages.

Outlining the country’s situation, ZERA confirmed that stocks are robust.

“Government notifies stakeholders that there are enough stocks of petroleum products…with more than three months’ supply cover,” the statement read, adding that supplies are currently secured from Beira and inland storage facilities.

To further insulate the market from external shocks, authorities are taking proactive measures. According to ZERA, the government is collaborating with oil traders to diversify supply routes away from conflict-affected areas.

This strategy aims to ensure uninterrupted availability of fuel regardless of geopolitical instability.

In a significant logistical shift, the government has also authorized the importation of diesel by road with immediate effect. Explaining this decision, ZERA highlighted that this measure is designed to ease supply bottlenecks by complementing the existing pipeline and rail transportation systems, ensuring that fuel reaches all parts of the country.

The intervention by the government has been particularly focused on protecting key economic sectors. Revealing the extent of the subsidy effect, ZERA pointed out that without government intervention, the price of diesel would have been even higher.

“The new price of diesel has been set with a view to mitigate the impact of the increase to the mining, agriculture, haulage services and passenger transport sectors,” the authority stated.

“Without Government intervention, the price of diesel would have been US$2.20 per litre.”

ZERA further noted that government entities, including PetroTrade and the National Oil Infrastructure Company (NOIC), are ramping up efforts to ensure equitable distribution of fuel, particularly to remote areas.

However, the continued price adjustments are expected to have a ripple effect across the Zimbabwean economy.

As the nation remains exposed to global energy market shocks, analysts predict that the increased costs will eventually translate into higher transport and production expenses, potentially fueling broader inflationary pressures in the coming weeks.