‘Fuel levy hike key for supply price, stability’

THE Government has taken proactive measures to guarantee fuel availability and price stability in the event of unforeseen supply market disruptions, amid growing uncertainties caused by the ongoing global trade wars, after increasing the strategic fuel reserve levy for petrol and diesel.

Through the Statutory Instrument 50 of 2025 (SI 50 of 2025), the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, adjusted upwards the fuel strategic levy to be billed per litre acquired by retailers.

“Effective May 9, 2025, the strategic reserve levy…shall be calculated at the rate of US$0,2470 per litre of petrol and at the rate of US$0,1870 per litre of diesel,” the minister announced.

This adjustment represents an increase of 28,34 percent from US$0,177/litre on the petrol levy and roughly 19,1 percent from US$0,157/litre on the diesel levy, both set in 2024.

Strategic Reserve Levy funds are used to build and maintain reserves of fuel to ensure uninterrupted supply in times of disruption, such as geopolitical unrest or supply chain breakdowns.

According to the Treasury, the updated rates align with global benchmarks and reflect Zimbabwe’s commitment to long-term energy resilience.

Economists say the proactive approach to counter the impact of potential supply disruptions in future, in an increasingly uncertain global market, where necessary, even though this at some point result in marginal price increases for consumers.

“We must be realistic, fuel is the lifeblood of any economy. Without a robust strategic reserve, we are at the mercy of international disruptions.

“Let me be clear, I think this is about protecting farmers, transporters, hospitals and every business that relies on fuel. They are acting now to avoid chaos tomorrow,” said Dr Prosper Chitambara, an economist.

Zimbabwe is thus building a war chest to guarantee fuel supply and price stability in the country going forward.

However, he noted that this came at a time when the levies and taxes on fuel are already many and high, leaving the country with expensive fuel relative to the region.

“Treasury also needs to look at this and relieve the economy from potential price push-throughs to end consumers.”

In a separate development, the Zimbabwe Energy Regulatory Authority (Zera) has announced that fuel prices will remain unchanged for May 2025, providing a measure of stability amid ongoing global oil market fluctuations.

This is because of regulatory provisions that benchmark the prices for each month to the global average fuel price for the previous month.

According to Zera’s latest update, diesel thus continues to retail at US$1,52 per litre, while petrol stays at US$1,61 per litre.

The unchanged prices follow April’s modest diesel price drop of 1,93 percent from US$1,55, and come despite continued volatility in international crude oil benchmarks.

In March and April, Brent crude oil experienced marginal movements, closing April around US$68,21 per barrel, down slightly from the month’s opening price of US$68,45.

The fluctuations were driven largely by geopolitical tensions and shifts in global supply forecasts, particularly from Opec+ member states.

Zera’s decision to maintain prices is widely seen as a stabilising measure.

Energy economist, Chipo Moyo, welcomed the durable stability, noting that stable fuel prices allow firms to plan with greater certainty.

“While a price cut is always welcome, stability in fuel pricing is equally important, especially for businesses managing thin margins,” said Ms Moyo.

“Predictable energy costs reduce uncertainty and help safeguard profit planning, especially in fuel-intensive industries.”

For households, the absence of an immediate price hike is viewed as a reprieve.

Kelvin Mombe, a Harare-based accountant, said that with inflation still affecting day-to-day expenses, holding fuel prices steady at current levels offers some relief.

“Even if the prices haven’t dropped further, not seeing them go up is a win in this economy,” Mr Mombe said. “It gives us some breathing space in terms of transport and basic goods costs.”

Small and Medium Enterprises (SMEs) are also expected to benefit from the fuel price stability. Eddie Saunyama, who runs E&H Construction, noted that fuel costs are among his business’s most significant operational expenses.

“We depend heavily on diesel-powered equipment and vehicles. When fuel prices are steady, we can quote jobs with confidence and avoid passing fluctuating costs on to clients,” Mr Saunyama said.

Analysts believe Zera’s decision reflects a cautious approach in balancing global trends with domestic economic dynamics and consumer welfare.-hrald