Zimbabweans Pay More Despite Government’s “Diesel Tax Cut,” Numbers Reveal Deception – Eduzim News

Tinashe Sambiri– Zimbabweans are questioning the government’s promises after diesel and petrol prices continued to rise, even after authorities claimed to have removed all taxes on diesel.

The government announced it would cut US$0.54 per litre from diesel, calling it an “unprecedented fiscal sacrifice.” Yet instead of falling, fuel prices went up, leaving citizens wondering if the tax cut ever existed.

On March 18, when ZERA set petrol at $2.17, the landed cost at Feruka — the actual price of fuel before local charges — was $1.16 per litre. That figure included the FOB price, pipeline fees, and financing. By April 3, petrol had risen to $2.23 per litre, despite Brent crude, the global benchmark for Zimbabwe’s imports, being lower than it was in March.

“If the global price that justified $2.17 is now lower, why is the pump price higher?” the figures seem to ask.

The government maintains it removed $0.54 per litre in taxes. If that were applied and the landed cost stayed the same, diesel should have dropped to about $1.51. Instead, it rose to $2.11 — a 60-cent increase beyond the expected price.

Either the tax cut was never applied, or the underlying FOB price surged far beyond what Brent crude alone can explain. ZERA claims the FOB price jumped 33 percent, but Zimbabwe holds three months of reserves. The fuel being sold today was purchased weeks ago at lower costs.

The pricing model, known as “replacement cost,” allows the government to charge today based on tomorrow’s prices, enabling officials to claim tax cuts while consumers continue paying more.

Looking back at the March 18 numbers, the landed cost of petrol was $1.16. Adding reasonable taxes, fair margins, and ethanol at global prices would yield roughly $1.50 per litre at the pump. Yet Zimbabweans are paying $2.23 for petrol and $2.11 for diesel.

The extra 70 cents on petrol and 60 cents on diesel is the result of policy decisions: taxes that never eased, an ethanol monopoly charging double the international rate, and a pricing system that benefits importers, not the public.

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