MOTORISTS, economists, opposition parties and the commuting public yesterday reacted angrily to President Emmerson Mnangagwa’s move to hike fuel prices by 150%, which triggered a wave of price increases on almost all commodities and services, further plunging the populace into poverty.
There was chaos in most towns and cities around the country as commuters woke up to astronomically high fares following the price increases announced by Mnangagwa on Saturday night.
The increases saw the price of diesel jumping from $1,26 to $3,11 a litre, while petrol now sells at $3,31 up from $1,34 per litre.
Renowned economist John Robertson said although the fuel price increase made economic sense, it would bring about some undesired consequences such as increasing the cost of living and pushing up inflation by between 40% and 50%.
“There will be steep increases in other costs. Increasing prices of fuel was the right thing to do. We had a wrong exchange rate. Fuel was too cheap and people from other countries were refuelling in Zimbabwe,” Robertson said.
“This was necessary. Unfortunately, (it) has side effects. This will trigger wage demands, inflation 40% and 50% before long. The companies are not making money already and they will close down. This will lead to serious job losses.”
He said government’s 1:1 exchange rate between the United States dollar and the local surrogate currency, the bond note, was unrealistic.
“They want to run the exchange rate as a privilege to other people. This is fuelling corruption,” he said.
