Zimbabwe Moves to Cut Fuel Taxes and Boost Ethanol Blending Amid Rising Prices

By Staff Reporter

Harare – Zimbabwe is taking urgent steps to ease rising fuel costs after President **Emmerson Mnangagwa** established a high-level committee to address the situation, signaling swift government intervention amid public concern.

Fuel prices have surged sharply, with petrol now retailing at US$2.17 per litre (≈ R40.15) and diesel at US$2.05 per litre (≈ R37.93), prompting calls for immediate relief from both consumers and businesses.

**Government Response**

Speaking on X on March 21, Presidential Communications official **George Charamba** explained that public complaints over fuel prices reached the President, who quickly directed **Finance Minister Professor Mthuli Ncube** to examine possible solutions.

A high-level inter-ministerial committee, led by Chief Secretary **Dr Martin Rushwaya**, was formed on March 20 to review the situation and propose measures to stabilize prices. Officials have been meeting regularly to finalize a relief package.

Taxes and Global Pressures Under Review

Zimbabwe imports all its fuel, leaving it vulnerable to international price fluctuations. Recent tensions in the Middle East have contributed to higher global oil prices, adding pressure to the local market.

Taxes and levies, however, remain a significant part of the cost. Currently, diesel carries about US$0.42 per litre (≈ R7.77) in taxes, while petrol is taxed at roughly US$0.85 per litre (≈ R15.73). Authorities are considering reviewing these charges to reduce the burden on consumers.

Professor Ncube emphasized the government’s efforts:
*"If we had allowed the full global impact to pass through, diesel would be selling at around US$2.20 per litre, but we managed to cap it at US$2.05."*

He also urged patience, noting that any fuel tax reductions cannot take effect immediately as legal and administrative processes must be observed.

**Ethanol Blending as a Long-Term Solution**

In addition to tax relief, Zimbabwe plans to increase ethanol blending in petrol from E5 to E20. This move aims to reduce reliance on imported fuel and support local production.

During a recent visit to **Green Fuel in Chisumbanje**, Vice President **Constantino Chiwenga** highlighted the importance of domestic ethanol production in mitigating fuel supply shocks. Green Fuel has a storage capacity of 40 million litres and is targeting production of 120 million litres of ethanol in 2026.

General Manager **Conrad Rautenbach** said motorists could save around US$0.18 per litre (≈ R3.33) under the E20 blending scheme:
*"If there was E20 now instead of E5, there would be a saving of roughly US$0.18 per litre at the pump."*

The government is also exploring long-term solutions such as electric vehicles and alternative energy sources to further reduce dependence on imported fuel.