Diesel in Zimbabwe just hit US$2.11 a litre. Petrol is at US$2.23. Those numbers might not mean much on their own, so here is some context. At the start of March, diesel was US$1.52. That is a 39% jump in roughly two weeks. Petrol went from US$1.56 over the same period.
The Chamber of Mines told the Zimbabwe Independent that opencast mining operations are taking the hardest hit. These mines run heavy machinery on diesel, and because the national grid cannot keep the lights on, many already depend on generators just to stay operational. Fuel is not optional for them. It is the cost of doing business.
Mining generates more than 70% of Zimbabwe''s export earnings. The sector has not scaled down operations yet, according to Isaac Kwesu, the Chamber of Mines CEO. But firms are tightening procurement, optimising haulage routes and cutting idle machinery time. Some larger operators are looking at solar and battery storage to reduce their exposure to diesel. The problem is that those investments need capital, and capital is not easy to come by after years of economic instability.
Gold producers may get some relief from firmer prices. Platinum, nickel and lithium miners are not so lucky. Those commodities have been volatile or weak, leaving less room to absorb rising fuel costs.
Why fuel is so expensive
Zimbabwe imports all its refined fuel. That makes domestic prices a direct function of global oil markets, plus whatever the government piles on top. And it piles on a lot.
A NewsDay editorial this week pointed out that Zimbabwe consistently ranks among the most expensive countries for fuel in the Southern African Development Community. The government has blamed global tensions, including the Middle East crisis. But other countries in the region face the same global prices and still manage to keep fuel cheaper, mostly by adjusting their tax regimes.
The editorial was responding to Finance Minister Mthuli Ncube''s decision to suspend customs duty on public service bus imports. The idea is to make buses cheaper so operators can expand their fleets and fares might come down. In theory, that works. In practice, operators might just pocket the savings while fares stay high. And the policy does nothing about the actual driver of transport costs, which is fuel.
As long as diesel stays expensive, transport costs stay high. That is true for buses, kombis and private motorists. Reducing fuel levies would have a wider and faster effect than subsidising bus imports. But so far, the government has not moved on that front.
The ZiG problem
Here is the part that surprises people outside Zimbabwe. The ZiG, the country''s own currency, is not accepted at most fuel stations. You read that right. Zimbabweans cannot buy fuel with Zimbabwean money.
New Zimbabwe reported this week on the rollout of upgraded ZiG banknotes, which started on April 7. Residents in Harare were not impressed. One told reporters: "These bank notes are not allowed at any fuel pump while that is our own Zimbabwean currency, so why is it they cannot buy essentials?"
The Reserve Bank has been trying to boost demand for the ZiG. Last month, the government directed all contractors doing work for the public sector to accept payment exclusively in ZiG. RBZ Governor John Mushayavanhu said this does not signal the end of the multicurrency system. He pointed to single digit inflation, 4.1% in January and 3.85% in February, as evidence that price stability has been achieved.
But currency confidence is not built on inflation numbers alone. It is built on whether people can actually use the money for the things they need. If you cannot buy fuel with ZiG, it is hard to argue the currency is ready to replace the US dollar.
What this means for you
If you are running a business in Zimbabwe, fuel costs are going up and there is no sign of a policy fix. Budget for higher transport and operating expenses in the coming months. If you hold ZiG, the currency is stable for now but its usability is still limited, especially outside Harare. Keep an eye on the IMF/World Bank Spring Meetings. Zimbabwe is trying to secure US$2.5 billion in bridge financing to clear arrears, which could unlock new funding channels. Whether that materialises is another question entirely.
