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Zimbabweans Pay More Despite Government\u2019s \u201cDiesel Tax Cut,\u201d Numbers Reveal Deception<\/p>\n<\/p><\/div>\n
Tinashe Sambiri\u2013 Zimbabweans are questioning the government\u2019s promises after diesel and petrol prices continued to rise, even after authorities claimed to have removed all taxes on diesel. <\/p>\n
The government announced it would cut US$0.54 per litre from diesel, calling it an \u201cunprecedented fiscal sacrifice.\u201d Yet instead of falling, fuel prices went up, leaving citizens wondering if the tax cut ever existed.<\/p>\n
On March 18, when ZERA set petrol at $2.17, the landed cost at Feruka \u2014 the actual price of fuel before local charges \u2014 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\u2019s imports, being lower than it was in March.<\/p>\n
\u201cIf the global price that justified $2.17 is now lower, why is the pump price higher?\u201d the figures seem to ask.<\/p>\n
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 \u2014 a 60-cent increase beyond the expected price.<\/p>\n
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.<\/p>\n
The pricing model, known as \u201creplacement cost,\u201d allows the government to charge today based on tomorrow\u2019s prices, enabling officials to claim tax cuts while consumers continue paying more.<\/p>\n
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. <\/p>\n
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.<\/p>\n
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