Zimbabwe triples fuel prices

Petrol queues have been growing

Zimbabwe has more than tripled the price of petrol to ease the country's fuel shortage, a move which is expected to push inflation to new record levels.

The second price rise in two months was announced by Energy and Power Development Minister Amos Midzi on state-run media on Tuesday and came into effect at midnight.

"With these price increases, I expect with good management and efficiency Noczim (the state oil company) should be able to improve the supply situation of fuel," Mr Midzi said.

Petrol increased from Z$145.2 to Z$450 (£5.21; $8.18) a litre, while diesel rose from Z$68 to Z$200.

Zimbabwe's Central Statistics Office said on Tuesday inflation had hit a record high of 228% in March.

Economic crisis

The country is in the third year of its worst economic crisis since independence 20 years ago.

The occupation of white-owned farms in 2000 by supporters of President Robert Mugabe, as part of the government's redistribution of white-owned farms to landless blacks, has scared off Western investors.

For three years Zimbabwe has experienced fuel shortages due to lack of foreign currency reserves to pay for imports.

In February, the government raised fuel prices by almost 100% to tempt private companies to import their own supplies and take the pressure of the foreign cash reserves.

Higher inflation

Last year, foreign oil companies with retail outlets in Zimbabwe were for the first time allowed to import their own supplies, breaking the monopoly of state-owned National Oil Company of Zimbabwe (Noczim).

The latest increases reportedly leaves official prices below those on the thriving black market.

Inflation is expected to rise further as the price of basic goods, like maize which trades at five time the official rate on the black market, rise further due to higher transport costs.

About seven million people, or half the population, face food shortages due to drought and disruptions of agriculture production due to farm seizures.

The Zimbabwe dollar is fixed at 55 to the US dollar and 800 to the dollar for exporters while on the black market it trades for up to 1,500 to the dollar.