Shops anticipate their sale volumes to go up as consumers’ spending power is restored by the stability of the Zimbabwe dollar against the US Dollar on the market which has resulted in a fall in the prices of fuel sold in forex.
Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu said that fuel together with foreign currency is the biggest cost centres determining prices. Said Mutashu:
This (reduction in fuel price) is a hugely positive development, which most people in the market never anticipated and I must note that this is hugely a reflection of the foreign currency market system.
Fuel and foreign currency are some of the biggest cost drivers in Zimbabwean business so when you start seeing them stabilising as is happening, then it’s a sign of good things to come.
So with this stability comes with the restoration of purchasing power.
The Zimbabwe Energy Regulatory Authority (ZERA), on Saturday, announced a reduction in fuel prices from US$1,28 per litre to US$1,18 for Blend (E20) while diesel is now US$1,09 per litre from US$1,04 per.
The development coincided with the firming of the local currency against the United States dollar on the forex auction over the past few weeks.
During the past two auctions, the Zimbabwe dollar has moved from ZWL$83.3994 to ZWL$83.3209, and now ZWL$82.6993 to the US dollar.