The government has moved in to reduce import duty on fuel by about 50 percent in order to limit the the increase on the pump price of the key commodity.

Finance Ministry Permanent Secretary, Mr George Guvamatanga said the adjustment has been factored into the new fuel prices of RTGS$4.89 and RTGS$4.97 for diesel and petrol respectively.

This comes as the Zimbabwe Energy Regulatory Authority (ZERA) this Tuesday announced the new price structure in light of the easing of the RTGS dollar on the interbank market.

RBZ Governor, Dr John Mangudya on Monday announced that procurement of fuel by oil marketing companies will, with immediate effect, be done through the interbank foreign exchange market in order to promote the efficient use of hard cash and avoid hoarding of the commodity.

The RTGS dollar consequently eased to 4,7 from 3,4 against the US dollar.

ZERA Acting CEO, Edington Mazambani said operators may sell petroleum products at prices below the cap depending on their trading advantages.

Economist, Mr Persistence Gwanyanya said the trend reflects that the interbank rate is likely to emerge as a strong market, thereby stamping out the black market.

“It also means money is going to be redirected from the black market to the interbank which is becoming stronger than the parallel market,” Mr Gwanyanya.

Before the pronouncement of the measures by the monetary authorities, the interbank market was trading at RTGS$3,4 to the greenback compared to the black market where the US dollar would fetch as much as RTGS$6.

Findings by the ZBC News also reflected that the RBZ pronouncement has created panic within the black market with rates tumbling to RTG$4,3 per US$1.