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Russian invasion sends Zim fuel prices haywire

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AS the Russian invasion of Ukraine continues with all the strategic geopolitical and economic consequences, the oil and fuel industry remains one of the most affected sectors.

NYASHA CHINGONO

Fuel prices have spiked around the world due to the war as well as the subsequent Western sanctions.

Zimbabwe has not been spared, with the pump price of petrol having spiked to an all-time high of US$1.68 per litre before coming down to US$1.59 this week. Diesel had gone up to US$1.68 but is now US$1.60.

Even though Zimbabwean fuel has marginally come down, it is still relatively higher than other countries in the region.

Despite high global oil prices, in Zambia petrol is pegged at US$1.24 , South Africa US$1.41, Mozambique US$1.08 and Botswana US$1.09.

The biggest impact of the fuel price increases globally is the stoking up of inflationary pressures.

Fuel price increases usually have a knick-on effect on the economy.

Tremors from the Russian invasion of Ukraine are spreading across the world as well as in Zimbabwe as record-high oil prices, excessive spending during forthcoming elections and disruptions of wheat supplies stoke inflation, with ordinary Zimbabweans suffering the brutal ramifications.

Less than a month after Russian President Vladimir Putin deployed troops to western parts of Ukraine, knock-on effects of the conflict are now spreading across the globe. 

Economic analysts also contend that Zimbabwe, which recovered from two years of economic contraction, may backslide and miss its key growth targets due to the conflict despite getting a shot in the arm from the International Monetary Fund.

The southern African nation received the equivalent of nearly US$1 billion worth of IMF Special Drawing Rights holdings to help cushion the country against the effects of the Covid-19 pandemic which has claimed the lives of millions across the globe.

Price of bread and Zimbabwe’s staple mealie-meal also rose due to a war-induced spike in commodity prices on the global market. Official figures show that Zimbabwe is consuming 16 000 metric tonnes of bread flour monthly, and approximately 1.2 million loaves a day. Demand for bread is expected to increase as aggregate demand improves, owing to removal of Covid-19 lockdowns.

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