Zimbabwe trebles the price of fuel

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Zimbabwe's government has trebled the price of fuel for private consumers while introducing a smaller increase for its own vehicles.

The so-called dual pricing system will add to the pressure on Zimbabweans already reeling from the high inflation rate, which rose to 400 per cent this month, and is likely to trigger more public discontent.

The powerful labour movement, the Zimbabwe Congress of Trade Unions (ZCTU), meets tomorrow to decide on mass action to protest what it calls Robert Mugabe's unmitigated mismanagement of the economy.

Public transport operators immediately doubled their charges after the Energy and Power Development Minister, Amos Midzi, announced the hikes on Wednesday night.

Economists saidinflation would hit 1,000 per cent by the end of the year.

Mr Midzi said the government had resolved to end immediately the state's monopoly on fuel imports and allow private companies to import. He said in a statement that the companies would be allowed to sell petrol at 1,170 Zimbabwean dollars (93p) a litre, up from Z$450 a litre. Diesel fuel, widely used in agriculture, goes up from Z$200 a litre to Z$1,060.

Mr Midzi said the government would continue to import fuel through its heavily indebted National Oil Company of Zimbabwe (Noczim) for use by the government, state institutions, agriculture and government-registered transportation operators.

He said the fuel imported by Noczim would be sold at lesser prices to the ones above, to cushion poor commuters from continued fare hikes and to help black farmers recently resettled on farms seized from their white owners.

But Noczim has failed to import significant amounts of fuel. Zimbabweans have been relying on the more expensive black market for fuel as there is none on the official market. The unofficial market for currency is also thriving. While the official exchange rate is Z$824 for each US dollar, an American dollar fetches Z$5,000 on the black market.

Critics say the two-tier system willcreate more room for the President'scronies, who will have access to cheaper government fuel, to resell it on the black market. One such prominent crony, Saviour Kasukuwere, had 35,000 litres of fuel seized by the police this week because he was selling it at black-market rates higher than the latest rates.