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Last Updated: Wednesday, 29 June 2005, 12:42 GMT 13:42 UK
Zimbabwe triples price of petrol
Zimbabwean drivers queue at a petrol station which has just received a fuel shipment
Zimbabwe has been short of fuel for months
The cost of petrol in Zimbabwe has been raised by a factor of three, in an attempt to curb rampant fuel smuggling and cope with the rising cost of oil.

An announcement in the official Herald newspaper said a litre of petrol would cost 10,000 Zimbabwe dollars ($1; 0.55), up from Z$3,600.

The rise follows months of extreme fuel shortages in Zimbabwe.

The country is also beset by sky-high unemployment, soaring inflation and a moribund economy.

Inflation has fallen from a high of more than 600% to about 144% in May, but could go up on the back of the fuel price hike.

After five years in which farmland has effectively been renationalised and - up to a point - redistributed, both agriculture and industrial production in Zimbabwe have collapsed.

The result has been a punishing shortage of hard currency, making fuel imports hard to come by.

Smuggling temptations

The government's announcement follows a recent increase in world oil prices, which have risen above $60 a barrel.

It was confirmed by Reuters, which visited five petrol stations.

The news agency's survey found that few stations had fuel to sell, but those which did were using the new price.

What little fuel is available is being routed first to public transport, hospitals, agriculture and government departments, the Herald said.

Very little is available on the free market, forcing commuters in the cities to give up on the normally-ubiquitous minibus taxies.

Instead, they rely either on walking or on lifts from those truck drivers who can lay their hands on petrol.

The shortages, many observers say, are exacerbated by cross-border smuggling.

The old fixed official price made Zimbabwean fuel the cheapest in the region.

With most Zimbabweans suffering the effects of the country's economic collapse, employees and officials of the state petroleum firm are believed to have diverted petrol to be sold in neighbouring countries.

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