Fuel prices have increased in Zimbabwe, which will result in elevated prices of basic goods and services and further erode disposable income, say economists.

The prices of petrol rose by 23.78% and diesel by 18.23% this week.

The government said of the price hikes: “Prices have been set in accordance with oil price patterns on the international market, which the authority is continuously monitoring. The public and operators are advised that the blending ratio is now at E10.

“Operators may sell the petroleum products below the prescribed prices depending on their trading advantages and should display prices in a prominent place as provided for by the fuel pricing regulations,” the government statement added.

A number of economists have said the price increases will pile inflationary pressure on the country’s economy and hinder economic growth.

“It further exerts and stokes inflationary pressures in the economy at a time when prices were already increasing. The consequent increase in the cost of production and living will adversely affect business viability as well as erode disposable incomes, thereby threatening the livelihoods of many. Economic growth for this year will be lower than initially projected,” economist Prosper Chitambara said to Newsday.

Whilst, economist Vince Musewe added: “Fuel hikes impact all sectors of the economy and push inflation. We are going to continue to see prices of basic goods and services increasing as fuel prices increase and the exchange rate worsens. This presents a serious disposable income problem. Life is becoming more expensive while incomes and salaries are static.”

President of the Confederation of Zimbabwe Industries, Kurai Matsheza said of the price hikes: “Fuel touches every sector of the economy and hence any upward movement of oil prices drives general inflation. All goods and services will be affected, and this hits the pocket of the consumer. These are headwinds against our concerted effort to bring down inflation. This movement of oil prices started worsening with the breakout of the Russia Ukraine war. The limited tools that our government has to cushion the citizens are to lower taxes, but the authorities may have limited legroom to deploy this measure.”