Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube told delegates at the Zimbabwe Investment Summit that the cumulative tax on diesel amounts to 54 US cents per litre, while conceding that inefficient procurement adds another 30–40 cents before taxes are even applied.
By Rudairo Mapuranga
Speaking during a question-and-answer session at the 66th Zimbabwe International Trade Fair (ZITF), Ncube attributed the country’s high fuel prices—the second-highest in the region after Malawi—to three factors: landlocked geography, taxes, and an elevated FOB (Free on Board) procurement price.
“It amounts to about 54 cents a litre for diesel, that’s the extent,” Ncube said, referring to the combined excise duty, ZINARA road levy, carbon tax, and strategic reserve levy. “I don’t think we can do much about it. It’s not so easy.”
Procurement Gap Exceeds Tax
The minister disclosed that Zimbabwe’s base fuel procurement price is structurally higher than regional benchmarks by 30 to 40 US cents per litre, even before any taxes or levies are added.
“Our procurement price in the country is about 30 to 40 cents higher a litre,” Ncube said. “We have to lower the cost of procurement. The price is 30 to 40 cents higher before we even get to taxes.”
He noted that when the government temporarily removed diesel taxes on 3 April, the pump price remained above regional averages, a direct consequence of the inflated FOB cost.
Petrol Levy Unchanged at Higher Rate
While Ncube focused on diesel, ZERA and Consumer Council of Zimbabwe data show that taxes and levies on petrol remain substantially higher, at approximately 86 US cents per litre. The minister confirmed in his address that “taxes and levies on petrol remain unchanged at current levels,” without specifying the figure.
The 86-cent levy on petrol includes the same components as diesel—excise duty, road levy, carbon tax, and strategic reserve levy—but with a higher excise rate applied to petrol as a non-industrial fuel.
Zig Acceptance for Fuel Purchases a Positive Signal
Asked about reports that some retailers are accepting Zig (Zimbabwe Gold currency) for fuel purchases, Ncube said the development is market-led and positive.
“It’s wonderful to see the market making its own decisions. Consumers and retailers will decide whether Zig will be accepted,” he said. “We cannot dictate at this stage which currency one should use. The fact that Zig is being accepted is a very positive thing.”
No Commitment on Ethanol Blend Increase
When asked whether the government would increase the mandatory ethanol-petrol blend ratio from the current 5% (E5) to 20% (E20)—a move that could lower pump prices by an estimated 50 cents per litre—Ncube did not commit, stating that such a decision requires a technical assessment of engine compatibility and vehicle fleet readiness.
