The Zimbabwe Energy Regulatory Authority (ZERA) has released the latest petroleum prices for December which have been reviewed downwards by US$ 0.03 for diesel and US$ 0.05 for petrol ahead of festive season.
Fuel prices are adjusted monthly due to factors including global oil prices and the Zimbabwe Dollar exchange rate.
The Ukraine war and its knock-on effects sent oil prices soaring earlier this year, driving Zimbabwean fuel prices higher and putting pressure on inflation which peaked at 31% month-on-month in June.
According to the latest figures, diesel will now cost US$ 1.70 per liter or ZW$ 1 113.03 using the current inter-bank market rate of 654.9284/USD from US$ 1.73.
Price of petrol will cost US$ 1.54 per liter or ZW$ 1 008.57 from US$ 1.59.
The development is a welcome relief for most Zimbabweans ahead of the festive season when families traditionally hit the road to various holiday destinations.
The fall in fuel prices comes as Government is anticipating inflation to close the year below 3 percent after this week, the Zimbabwe National Statistics Agency (Zimstat) released November inflation rate figures as having dropped to 1.8 percent from 3.2 percent in October.
Inflation is projected to be within the 1 percent and 3 percent band next year which if achieved, it will be an ideal starting point for sustainable growth of the economy.
Authorities have reiterated the need to sustain the current exchange rate stability by maintaining a tight monetary policy which has kept Central Bank policy rates at 200 percent.
The Reserve Bank of Zimbabwe’s Monetary Policy Committee is set to meet this Friday and of key interest will be the decision it makes on the 200 percent interest rate going into the New Year.
“Normally, interest rate decisions are based on projected annual average inflation for the next 12 months. Treasury’s m-o-m inflation target of 1-3% is achieved, annual average inflation for 2023, will be significantly lower, probably two digit level,” said MPC member and economist, Persistence Gwanyanya on Twittter.
“Assuming no major shocks this target looks achievable however; downside risk is still high- 2023 general election & geopolitical factors. Whilst decision on interest rate is key, timing is equally important let’s wait and see what happens on Friday,” he added.