The Strait of Hormuz is open, oil prices have dropped – so why is Zimbabwe’s fuel still the most expensive?

Tendai Ruben Mbofana

The recent announcement by Energy and Power Development Minister July Moyo that fuel prices have finally nudged below the US$2.00 mark is being treated by state media as a grand gesture of economic relief. 

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We are told a familiar story: global geopolitical hostilities closed the Strait of Hormuz, international crude spiked, and Zimbabwe, as a landlocked nation, was simply caught in the geopolitical crossfire. 

Now that Middle East tensions have eased, the state claims its “proactive strategies”—including tax relief and aggressive ethanol blending to E20—are successfully “cushioning” the ordinary citizen.

But a closer look at the mathematics of the fuel pump reveals a completely different reality. 

The official narrative relies heavily on global scapegoats to obscure a stubborn, uncomfortable truth: Zimbabweans are being systematically overcharged for fuel, and the justifications offered by the authorities simply do not hold water.

To understand how hollow the geographical argument is, one only needs to look across our borders. 

The authorities frequently lean on the “landlocked” excuse to explain away exorbitant logistical costs. 

Yet, neighboring countries facing the exact same geographic constraints manage to keep their fuel significantly cheaper without subjecting their citizens to chronic shortages. 

As of mid-June 2026, while Zimbabweans are instructed to celebrate a petrol price of US$1.98 and diesel at US$1.99, motorists in landlocked Zambia are paying roughly US$1.54 for petrol. In landlocked Botswana, petrol hovers around US$1.53. 

Both nations move their commodities across vast regional distances from the exact same coastal ports, yet their retail prices are nearly 25 percent lower than ours. 

If the physical distance to the sea were the primary driver of our fuel pricing, our pump prices would naturally align with our neighbors. 

They do not.

This glaring disparity exposes the fundamental flaw in the government’s claim that it has removed levies and taxes to protect consumers. 

The official Zimbabwe Energy Regulatory Authority (ZERA) notice effective June 19, 2026, tells the real story. 

Even when global Brent crude retreats below US$86 a barrel, Zimbabwe maintains an artificially high pricing floor. 

This is because our fuel is not just a commodity; it is a critical fiscal tool for the state. 

Over US$0.50 of every single litre sold at the pump goes toward a dense thicket of fixed domestic taxes, administrative duties, and historical debt-redemption levies. 

True economic cushioning would require a permanent, structural dismantling of this state-imposed tax burden, rather than minor, temporary adjustments at the margins during global crises.

The contradictions become even more absurd when analyzing the state’s flagship intervention: local ethanol blending. 

For years, the public has been told that mixing locally produced sugarcane ethanol with imported petroleum is the key to reducing the national fuel bill and lowering retail prices at the pump. 

The government recently raised the blending ratio to E20, ostensibly to lower costs. 

But a basic evaluation of petrol economics completely destroys this claim.

When you buy a litre of Blend (E20) at US$1.98, you are only buying 80 percent imported petroleum; the remaining 20 percent is locally produced sugarcane ethanol. 

For this mandatory policy to actually “cushion” anyone, local ethanol must be significantly cheaper to acquire than importing pure petroleum across oceans, through global conflict zones, and down regional pipelines. 

If local ethanol were priced reasonably, substituting a fifth of our fuel with a domestic crop would drastically pull the final pump price down, making our petrol noticeably cheaper than our neighbors’ unblended fuel. 

Instead, Zimbabwe’s E20 blend remains a staggering 44 cents more expensive per litre than Zambia’s petrol. 

This mathematical reality proves that the consumer derives absolutely no benefit from mandatory blending. 

The math reveals a lucrative charade: either the private domestic ethanol monopoly is pricing its product as high as imported oil to maximize its own profits, or the state is pocketing the massive cost difference through hidden levies.

What is truly deceptive, however, is the claim that these inflated prices are a necessary prerequisite for “security of supply.” 

The state frames an artificial, state-created structural failure as an unavoidable law of physics, arguing that high prices are the only barrier between the nation and a return to chaotic fuel queues. 

This argument is nothing short of economic extortion, weaponizing the trauma of past shortages to make a predatory, revenue-maximizing pricing structure look like a benevolent public service. 

The underlying reality is that the government is not using high prices to absorb actual procurement costs.

It is using them to subsidize a deeply inefficient, state-controlled currency architecture and to guarantee risk-free profits for a select group of politically connected cartels.

Unlike our neighbors, who operate on open, competitive market models, Zimbabwe’s fuel sector is tightly bound to the country’s broader macroeconomic dysfunctions. 

Because the government cannot guarantee access to foreign exchange at predictable rates through normal banking channels, it has transformed the fuel pump into a direct, unregulated foreign currency collection point. 

By fixing the price of fuel near the US$2.00 mark, the authorities are effectively transferring the entire risk of national currency instability onto the motorist. 

The high price is an artificial cushion designed to protect major oil contracting companies from sovereign credit risks and local currency volatility. 

The state is essentially confessing its own policy failure: it cannot fix the financial system, so it forces the citizen to pay a permanent premium to bypass it.

​This systemic extraction is further exposed by the complete lack of transparency surrounding the National Oil Infrastructure of Zimbabwe (NOIZ) and the Beira-to-Harare pipeline. 

The pipeline is the cheapest way to transport fuel in the region. 

Logistically, moving fuel via a pipeline directly into storage depots should give Zimbabwe a massive cost advantage over countries like Zambia or Botswana, which rely far more heavily on expensive road haulage over thousands of kilometers. 

Yet, the cost savings of this infrastructure are completely invisible to the consumer. 

Instead, the state uses its monopoly over the infrastructure to levy heavy transit and handling fees. 

According to NOIC’s official tariff structure, the fee just to pump fuel from Beira to Msasa is US$78.89 per cubic meter—which translates to roughly US$0.08 per single litre built straight into the cost before local taxes even touch it. 

By inflating the costs of our own geographical assets, the state keeps a bloated, opaque bureaucratic apparatus afloat at the literal expense of the motorist.  

Instead, the state uses its monopoly over the pipeline and national storage tanks to levy heavy transit and handling fees, keeping a bloated, opaque state bureaucratic apparatus afloat.

Neighboring countries never experience shortages despite charging far less because their security of supply is guaranteed by open competition, transparent taxation, and functional currency markets. 

They do not need to bribe suppliers with inflated retail margins to keep fuel on the grid. 

Fuel occupies a unique space in the local economy because it is one of the few commodities traded almost exclusively in hard currency. 

For a government perpetually starved of foreign exchange, the fuel pump is an irreplaceable, highly liquid USD cash cow. 

The authorities cannot afford to genuinely slash taxes or foster true retail competition because doing so would choke off a vital stream of state revenue.

It is time to reject the narrative of external victimhood. 

The Strait of Hormuz has reopened, global crude has normalized, and yet the local pricing structure remains stubbornly resistant to real relief. 

The high cost of fuel in Zimbabwe is not a casualty of distant wars or geographical misfortune. 

It is a direct result of aggressive domestic taxation, protected monopolies, and a policy that prioritizes state revenue over the economic survival of its people. 

Until the state confronts its own fiscal addiction to the fuel pump, the Zimbabwean consumer will continue to pay the highest price in the region for the simple illusion of stability.

• Tendai Ruben Mbofana is a social justice advocate and writer. To directly receive his articles please join his WhatsApp Channel on: https://whatsapp.com/channel/0029VaqprWCIyPtRnKpkHe08