Zim GBC News Reporter
BULAWAYO – Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has called on fuel dealers to index their prices in the local currency, warning that exclusive reliance on United States dollars exposes operators to exchange rate losses when meeting tax obligations.
Addressing stakeholders during the Bulawayo provincial monetary policy statement presentation on Tuesday, Mushayavanhu argued that dealers who sell fuel exclusively in foreign currency face a disadvantage when converting USD to ZiG for tax payments.
“When the day comes for you to purchase fuel or pay tax, you have to find ZiG. Some dealers say, ‘No problem, I will go to my bank, sell US dollars and get ZiG,” Mushayavanhu said.
“Yes, you can do that. But when you sell foreign currency, the bank buys it from you at the buying rate.”
The Cost of Conversion
The central bank chief revealed that the current buying rate stands at approximately 25 percent, meaning dealers suffer significant losses when converting USD to ZiG through formal banking channels.
“So you are actually losing out. You would be better off selling some of your fuel in ZiG at an exchange rate of 30,” he said.
Mushayavanhu noted that the repeal of Statutory Instrument 81A now allows traders to determine their own exchange rates, giving fuel dealers flexibility to price competitively in local currency.
He disclosed that some dealers have already begun accepting ZiG for bulk purchases.
“We have seen certain fuel dealers selling fuel in bulk in ZiG. They may not be doing it at the pump station, but they will say, ‘If you want 60 000 litres, I want payment in ZiG.’ It is happening,” Mushayavanhu said.
“As we entrench the use of ZiG in the market, you are going to see more of that happening. You may even see some forecourts selling fuel in ZiG. It is coming.”
New ZiG Notes Coming
The governor’s remarks come as the central bank prepares to introduce redesigned ZiG banknotes next month, part of broader efforts to encourage local currency usage since the ZiG replaced the Zimdollar in April 2024 following hyperinflation.
Mushayavanhu emphasized that reducing dependence on foreign currencies insulates the economy from external shocks.
“There are geopolitical issues that may interfere with our ability to achieve stability,” he warned.
“We are aware of potential increases in fuel prices arising from tensions in the Middle East, but authorities are determined to ensure inflation remains under control in 2026.”
Mixed Acceptance
Despite central bank efforts, the ZiG has faced resistance from retailers and some service providers—including government entities—still scarred by past hyperinflationary experiences that rendered the previous local currency worthless.
Industry analysts suggest that widespread acceptance will depend on sustained stability and confidence in the currency’s value retention.
The RBZ’s latest push targets the fuel sector as a strategic entry point for deepening ZiG circulation, with Mushayavanhu expressing confidence that more forecourts will gradually adopt local currency pricing.
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