BREAKING: Government suspends diesel taxes to cushion economy

Government is with effect from Friday temporarily removing taxes on diesel amounting to US$0.54 per litre, in a move aimed at shielding consumers and key productive sectors from rising global fuel prices while safeguarding macro-economic stability.

In a statement on Thursday evening, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the intervention underscores Government’s commitment to cushioning the economy from external shocks.

“Government, under the visionary leadership and guidance of President Mnangagwa, has taken decisive and unprecedented action to cushion citizens and industry from the adverse effects of rising global fuel prices,” he said.

The decision comes against a backdrop of escalating geopolitical tensions in the Middle East, which have disrupted global oil markets and driven up international fuel prices.

“This intervention comes in the context of escalating geopolitical tensions in the Middle East, which have significantly disrupted global oil markets, resulting in sharp increases in international fuel prices,” said Prof Ncube.

He added, “These developments have a direct bearing on Zimbabwe’s fuel import costs, with potential knock-on effects on production, transportation, and the general price level.”

He said Government had taken into account public concerns over the contribution of domestic fuel taxes to high pump prices.

“Cognisant of these developments, and mindful of longstanding public concerns regarding the contribution of domestic fuel taxes to pump prices, Government has resolved to remove all taxes levied on diesel, with effect from 3 April 2026.”

Prof Ncube said the suspended taxes include excise duty, the Zimbabwe National Road Administration (ZINARA) road levy, carbon tax and the strategic reserve levy.

“These taxes collectively amount to US$0.54 per litre, representing a significant proportion of the retail price of diesel, a critical input in agriculture, mining, manufacturing, and logistics, which would have gone up to US$2.65 per litre.

“However, taxes and levies on petrol remain unchanged at current levels.”
He described the measure as bold and necessary in preserving economic stability.

“This bold and unprecedented measure reflects Government’s commitment to protecting both consumers and productive sectors from external shocks, while safeguarding macro-economic stability.”

The removal of diesel taxes is expected to provide relief to businesses by lowering operating costs, particularly in sectors heavily reliant on fuel such as transport, agriculture, mining and manufacturing.

Prof Ncube said the intervention would also help stabilise prices of basic goods and services, anchor inflation expectations and sustain the country’s economic recovery momentum.

“Government is, therefore, making a deliberate and significant fiscal sacrifice in the national interest, prioritising economic stability and the welfare of citizens over short-term revenue considerations.

“This measure underscores the Second Republic’s responsive and people-centred approach to economic management, as well as its commitment to ensuring that every Zimbabwean is cautioned against the impact of the current global economic headwinds.”

He added that authorities will continue to monitor global developments and stand ready to act if necessary.

“Government will continue to closely monitor global developments and stands ready to implement further measures, where necessary, to safeguard the economy, as well as ensure availability of sufficient fuel stock in the market.”