Analysis on the impact of statutory instrument 50 of 2025

Statutory Instrument 50 of 2025 introduces an amendment to Section 22H of the Finance Act, revising Zimbabwe’s fuel levy rates to US$0.2470 per litre for petrol and US$0.1870 per litre for diesel.

Statutory Instrument 50 of 2025 introduces an amendment to Section 22H of the Finance Act, revising Zimbabwe’s fuel levy rates to US$0.2470 per litre for petrol and US$0.1870 per litre for diesel. The changes represent a 19.3% increase for petrol and a 27.2% increase for diesel in terms of levy amounts, adversely impacting on cost structures, inflation outlook, and overall competitiveness. This introduces a revenue and development trade-off dilemma (economic benefits may be short-lived or unevenly distributed) and likely cause regional competitiveness
disparity for Zimbabwe.

To mitigate the adverse effects, the government is urged to consider providing incentives or tax breaks to fuel-intensive industries to absorb the impact of rising costs and gradually introduce levy changes to help minimize economic shocks and give businesses time to adjust to prevent productivity losses.

Introduction
The Statutory Instrument 50 of 2025 amends Section 22H of the Finance Act to revise the fuel levy rates for Zimbabwe through increasing diesel and petrol levy rates to US$0.1870 and US$0.2470 per litre of diesel and petrol respectively, which is contrary to Government efforts towards reducing compliance costs. Fuel is a cross-cutting driver, hence the increase in price will be passed on to consumers leading to high cost of living.