Zimbabwe raises petrol price by 122% a litre

Zimbabwe says it will more than double the price of petrol and diesel.

A spokesman for the oil industry told the state-run Zimbabwe Broadcasting Corporation that the price of a litre of petrol had been increased from 10,000 Zimbabwe dollars (€1.06) to 22,300 Zimbabwe dollars (€2.36) – a 122% increase.

The price of diesel went up from 9,800 Zimbabwe dollars a litre to 20,800 Zimbabwe dollars.

“We believe this is a welcome development,” said the spokesman.

He attributed the need for the increase to soaring world oil prices, boosted by the effects of Hurricane Katrina in the Gulf of Maxico, and the falling value of the Zimbabwe dollar, devalued twice since the last fuel prices were announced in June.

Worth $2 at independence in 1980, the Zimbabwe dollar is now 23,520 to $1 at the official rate and more than 45,000 to $1 on the illegal black market which the government is fighting hard to suppress.

The International Monetary Fund board meets tomorrow to consider whether Zimbabwe should be expelled or if it has adequately met demands for action on limiting and redirecting state spending, and repaying arrears in debt servicing.

Conservative estimates say inflation, which reached 623% last year, will reach 400% by the year’s end, with some observers forecasting 1,000% inflation if the uniformed services and civil servants threaten strikes to keep pace with the falling purchasing power of their salaries.

After 25 years in power President Mugabe, 81, is heavily dependant on the military and bureaucrats to sustain his regime.

Production and exports have crashed since 5,000 white-owned commercial farms were seized by militants, acting on Mugabe’s orders, from February 2000 onwards.