Zimbabwe fuel prices remain high due to taxes, transport costs and procurement inefficiencies: Mthuli Ncube

Zimbabwe’s persistently high fuel prices are being driven by a mix of structural costs, taxes, and procurement inefficiencies, Finance Minister Mthuli Ncube has said. Speaking at a business forum in Bulawayo, Ncube outlined why motorists in Zimbabwe continue to pay more at the pump compared to regional peers, despite global oil price fluctuations.

Zimbabwe’s lack of direct access to the sea remains a major factor behind high fuel prices. As a landlocked country, it depends on imports routed through neighbouring countries such as Mozambique and South Africa. Fuel is typically shipped via ports like the Port of Beira before being transported inland by pipeline or road, adding high logistical costs.

Energy analyst Persistence Gwanyanya told Southerton Business Times that “transport and handling costs can account for a substantial share of the final pump price in landlocked economies like Zimbabwe.” A fuel tanker driver who operates along the Beira-Harare corridor said delays at border posts and rising transit fees are also contributing to higher costs.

“Sometimes trucks spend days waiting for clearance. Those delays translate into higher prices for consumers,” he said.

Ncube said taxes and levies imposed by the government make up a notable portion of Zimbabwe’s fuel price structure. According to state media, The Herald, authorities have occasionally adjusted these charges to cushion consumers from price shocks. However, the minister highlighted procurement inefficiencies as the biggest concern.

“We are paying more for fuel at source compared to other countries,” Ncube said, noting that the price gap exists even before taxes are added.

Economist Gift Mugano said improving procurement systems could significantly reduce fuel costs. “If Zimbabwe secures fuel at competitive international prices, it can ease inflationary pressure across the economy,” he explained.

Ncube also pointed to growing use of the Zimbabwe Gold currency, or Zimbabwe Gold (ZiG), in fuel transactions. He described this as a positive development, signalling increasing confidence in the country’s monetary system. Recent data from the Reserve Bank of Zimbabwe shows a gradual increase in ZiG usage in formal transactions, including fuel purchases.

Global factors, particularly geopolitical tensions in the Middle East, continue to influence fuel prices worldwide. Zimbabwe is not immune to these shocks, which affect import costs and supply chains.

To mitigate the impact, the government has introduced measures such as maintaining strategic fuel reserves and increasing ethanol blending levels in petrol from 5% to 20%. According to the Zimbabwe Energy Regulatory Authority, higher ethanol blending has helped reduce the overall cost of petrol while supporting local production. Ncube said authorities are also exploring the possibility of extending blending to diesel, which could further ease prices.

While acknowledging that fuel taxes remain an important revenue stream for the government, Ncube said there is room for flexibility in how they are applied. He emphasised that addressing procurement inefficiencies and expanding blending initiatives will be critical to stabilising fuel prices in the long term.

Zimbabwe fuel prices