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BULAWAYO – As Zimbabwean motorists groan under the weight of petrol prices exceeding US$2.20 per litre, their Zambian neighbours are paying the equivalent of just US$1.41 for the same product. The stark disparity has reignited debate over government tax policy and whether Harare is prioritising revenue over relief.
The official line from Zimbabwean authorities has consistently blamed global oil prices and geopolitical shocks. But Zambia faced the identical international squeeze — during its April review period, diesel prices surged nearly 92% and petrol nearly 63% on global markets.
So how did Lusaka keep pump prices low?
According to trade analysts, Zambia’s government temporarily suspended excise duty and zero-rated VAT on petrol and diesel for three months. No complex subsidy scheme. No treasury cheques written to oil majors. Just a decision to stop collecting certain taxes.
The result: despite a ferocious global spike, Zambian petrol landed at roughly US$1.41 per litre and diesel at US$1.54.
“Zambia chose to take its hand out of the consumer’s pocket. That is not rocket science — it is policy choice,” said Harare-based economist Tendai Marova.
Zimbabwe’s ‘Sacrifice’ That Wasn’t
Back home, the Zimbabwean government claims it removed US$0.54 in taxes from diesel to cushion consumers. Yet even after this adjustment, diesel remains at US$2.11 per litre and petrol at US$2.23.
Here is the figure that has fuel industry insiders shaking their heads: Zimbabwe still collects approximately US$0.86 in taxes and levies on every single litre of petrol. That includes excise duty, strategic reserve levy, carbon tax, and the debt redemption levy — meaning nearly 40% of the pump price is pure tax.
“If you do the maths, a Zimbabwean is paying nearly US$0.82 more for petrol than a Zambian. We are the most expensive outlier in the region,” said motorist and commuter advocate Precious Shumba.
The Ethanol Twist
Adding to the burden is Zimbabwe’s mandatory ethanol blending policy. Motorists are forced to buy fuel blended with local ethanol priced at roughly US$1.10 per litre — double the international price. Meanwhile, surplus ethanol is exported to neighbours including Zambia at market rates.
“It looks less like a fuel crisis and more like a policy choice,” Shumba added.
“One government chose to absorb the shock by reducing its revenue. The other seems content to let the people carry the can.”
Painful Question
How can the same barrel of oil, shipped to two neighbouring landlocked countries facing identical global supply chains, produce such a massive price difference?
The answer, economists say, is not in Rotterdam or the Middle East. It is in the local tax structure. While Zambia temporarily cut taxes to save citizens money, Zimbabwe has kept its levies high.
Efforts to reach the Ministry of Energy and Power Development for comment were unsuccessful at the time of publication.
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