The government announced it was removing all taxes on diesel, a full US$0.54 per litre, calling it an “unprecedented fiscal sacrifice.” Then diesel went up. Petrol went up. And Zimbabweans are left asking: was the cut ever real? Let us go back to the numbers that matter.
The landed cost that did not change
On March 18, when ZERA set petrol at $2.17, the landed cost at Feruka, the fuel itself, before any local charges, was $1.16 per litre. That included the FOB price, pipeline fees, and financing.
On April 3, with petrol at $2.23, ZERA did not publish a new build-up. But the underlying components cannot have moved dramatically.
Why? Because Brent crude, the benchmark that drives Zimbabwe’s import costs, has not increased since the last review.
On March 18, Brent was above $112. Over the past weeks, it has fluctuated but averaged around $103 per barrel. In recent days, it has climbed to $109, still below the March 18 level that triggered the last hike.
If the global price that justified $2.17 is now lower, why is the pump price higher?
The 54-cent question
The government claims it removed $0.54 in taxes from diesel. If that were true, and if the underlying landed cost remained the same, diesel should have dropped to roughly $1.51 per litre.
Instead, diesel rose to $2.11. That is a 60-cent increase from the expected post-cut price. Something is wrong.
Either the tax cut was never applied, or the underlying FOB price surged far beyond what Brent alone explains. ZERA claims the FOB price for diesel jumped 33%. But Zimbabwe holds three months of reserves. The fuel being sold today was purchased weeks ago, at lower prices.
The “replacement cost” model allows the government to charge tomorrow’s prices today, and to claim tax cuts while raising the final bill.
What Zimbabweans are really paying
Let us return to the March 18 build-up. The landed cost of petrol at Feruka was $1.16. Adding a reasonable tax, fair margins, and ethanol at international prices would yield a pump price of roughly $1.50 per litre.
Instead, Zimbabweans pay $2.23 for petrol and $2.11 for diesel. The difference, roughly 70 cents on petrol, 60 cents on diesel, is pure policy. Taxes that never ease. An ethanol monopoly that charges double the global rate. A pricing model that protects importers, not consumers.
The question the government will not answer
Was the 54-cent tax cut real? If it were, diesel should have dropped. It rose. If it was not, the government misled the nation.
Either way, the poor are paying. Brent is down from its March peak. The landed cost at Feruka has not doubled. Yet fuel is more expensive than ever.
The numbers do not lie. The question is whether the government will answer for them.
Contributed by Benedict Makore, a political and social commentator based in Harare.