BREAKING: Cabinet Approves Fuel Tax Cuts to Curb Inflation; E20 Blending Set to Return

Information Minister Zhemu Soda

By Business Reporter

HARARE – In a direct response to the escalating energy crisis in the Middle East, the Government of Zimbabwe has moved to stabilize the domestic economy by approving "time-bound" fuel tax reductions. The move, announced by Information Minister Zhemu Soda during Tuesday’s post-Cabinet briefing, aims to shield consumers from the inflationary "tsunami" currently hitting the transport and basic commodity sectors.

With petrol prices recently peaking at US$2.17 per litre, the Cabinet's intervention comes as a relief to logistics and manufacturing firms. While the specific percentages are yet to be gazetted, Minister Soda confirmed that the review of selected taxes is designed specifically to contain the cost of doing business.

“Cabinet considered and approved a review of selected and time-bound fuel taxes in order to contain inflationary pressures and safeguard consumer welfare,” Soda stated.

A more controversial pillar of the government’s strategy is the proposal to increase ethanol blending from the current E5 (5% ethanol) back to E20 (20% ethanol).

Local ethanol producers claim that moving to E20 could save motorists approximately 18 cents per litre. However, for the Zimbabwean motoring public, the "math" of ethanol remains a point of deep frustration.

The Case Against High-Blend Ethanol:

• Energy Density: Motorists argue that ethanol contains roughly 30% less energy per gallon than pure gasoline. This results in lower mileage per tank, potentially negating the 18-cent saving at the pump.

• Corrosive Nature: Mechanical experts warn that high ethanol concentrations are hygroscopic (they attract water) and can be corrosive to rubber seals, gaskets, and fuel lines in older or high-performance engines.

• "Knocking" Concerns: Many drivers have reported engine "knocking" and reduced performance, fueling a perception that mandatory blending provides a "substandard" product compared to the pure unleaded fuel sold in South Africa or Botswana.

The Cabinet's push for E20 also reignites the debate over Zimbabwe's lack of consumer choice. Unlike regional neighbors who offer varying blends (E10 or E85) alongside pure petrol, Zimbabwean stations operate under a mandatory blend regime.

"If we are paying US$2.17 for a blend, it should be significantly cheaper than the pure petrol found in the region," noted one Harare-based fleet manager. "Currently, we are paying a premium price for a diluted product."

Minister Soda concluded by stating that the government is still "refining the options," with formal price adjustments expected to be announced in the coming days.

Zimbabwe fuel tax reduction 2026