The Zimbabwe Energy Regulatory Authority (ZERA) approved a 50 percent increase in the price of fuel on Tuesday, just hours after threatening fuel companies who raised prices or withheld fuel from the market.

The frantic statements came after fuel companies deliberately withheld fuel, already in short supply, to force ZERA’s hand.

The oil companies feared selling their stocks at old prices would decimate their capital after the Reserve Bank of Zimbabwe directed on Monday that they would now buy dollars to import fuel on the interbank market.

That arrangement has ended and the companies would only access dollars on the interbank market from Tuesday, RBZ governor John Mangudya said in a statement.

“The new position is necessary to promote the efficient use of foreign exchange and to minimize and guard against incidences of arbitrage within the economy,” Mangudya said.

Fuel companies reacted almost immediately by asking ZERA to approve an increase, which the regulator appeared to have resisted initially.

“The petroleum industry is advised that the prices of fuel have not changed and operators are expected to continue selling fuel into the market as is expected of them,” ZERA CEO Eddington Mazambani said in a statement early Tuesday.

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