Strategic fuel levy to anchor infrastructure projects — NCC

The National Competitiveness Commission of Zimbabwe (NCC) has hailed the Government’s recent decision to adjust the Strategic Fuel Levy in a development expected to stabilise supply and prices.

The commission said the amendment to Section 22H of the Finance Act, through Statutory Instrument 50 of 2025, was a landmark decision that would drive long-term growth and infrastructure development.

The commission believes the revised fuel levies, set at US$0,2470 per litre for petrol and US$0,1870 per litre for diesel, strike a careful balance between fiscal sustainability and the imperative to modernise Zimbabwe’s road and energy networks.

“We welcome the amendment to Section 22H of the Finance Act revising the fuel levy rates to US$0.2470 per litre for petrol and US$0.1870 per litre for diesel, which reflects both the need to generate essential revenue and our commitment to transparent, targeted reinvestment,” said the NCC in its report.

The commission noted that, although the levy hikes were significant, 19,3 percent on petrol and 27,2 percent on diesel, the adjustments would be implemented in a phased manner to minimise shocks to transport-intensive sectors and consumers.

According to the NCCZ, fuel levies have historically contributed between 35 percent and 40 percent of the pump price in Zimbabwe, a rate broadly in line with regional peers such as Kenya and South Africa, where total taxes can comprise up to 40 percent of retail fuel prices.

“Maintaining competitiveness in Southern Africa requires periodic recalibration of our fiscal instruments. SI 50 of 2025 ensures we remain on par with our neighbours, while also funding critical infrastructure,” the NCC statement added.

Beyond revenue generation, the commission underlined the strategic importance of leveraging levy proceeds to modernise transport corridors and expand renewable energy capacity.

“These funds will be transparently directed towards upgrading our highways, rehabilitating ageing bridges and enhancing the transmission network, thereby lowering logistics costs for manufacturers, miners and farmers,” the NCC asserted.

Such investments, NCC said, would ultimately improve the price competitiveness of Zimbabwean goods on international markets and attract fresh foreign direct investment.

However, to mitigate the transitional effects, the NCC reiterated its call for targeted measures.

“We urge the Government to consider accelerated tax rebates for high-fuel-intensity sectors such as agriculture, mining and manufacturing, alongside a phased implementation schedule.

This will afford businesses the necessary adjustment period without compromising productivity,” the commission said.

Further, NCC recommended ongoing regional benchmarking to prevent arbitrage and fuel smuggling, advocating stakeholder forums to refine levy structures collaboratively.

In its review, the NCC expressed confidence that the benefits of SI 50 of 2025 would accrue over the medium and long term.

“While initial adjustments may pose challenges, we are confident that the additional revenue will be transparently and efficiently reinvested into productive infrastructure and sustainable initiatives, laying a robust foundation for Zimbabwe’s global competitiveness,” the NCCZ concluded.

As Zimbabwe positions itself to capitalise on a resurgence in regional trade and investment, the commission’s endorsement of SI 50 assures domestic businesses and international partners that fiscal prudence and developmental priorities can be mutually reinforcing.

By coupling measured levy increases with a commitment to transparency and targeted incentives, Zimbabwe hopes to emerge as a model of balanced economic policy in Southern Africa.-herald