How February’s Fuel Price Reflects ZiG Use in Daily Transactions

By Tinotenda Bhunu

HARARE – WHEN you fill up your tank this month, the numbers on the pump may say ZiG 38.84 for Diesel 50 or ZiG 40.04 for Blend E5, but the question many Zimbabweans are asking is simple: is ZiG really in your wallet or just on paper?

The Zimbabwe Energy Regulatory Authority (ZERA)’s February 2026 price announcement affects everything from kombi fares to grocery bills, yet it also highlights a deeper tension: while fuel is officially priced in ZiG, daily transactions across the country still lean heavily on US dollars or parallel rates. What looks like a routine adjustment on paper is, in reality, a monthly litmus test of the ZiG’s credibility in everyday life.

The Real Experience: ZiG vs. USD

Officially, ZiG trades at around 26–28 to the US dollar, but in informal markets, where most people access foreign currency, rates are often higher. That difference matters.

If you earn in ZiG but prices are psychologically anchored in USD, you constantly feel the squeeze. Kombi drivers calculate fuel in dollars. Shop owners hedge against exchange rate swings. Salary earners worry that next month their money will buy less. While fuel is quoted in ZiG, the real benchmark remains the US dollar. This gap between policy and lived experience is the real economic story.

ZiG: Policy Confidence vs. Market Confidence

Since April 2024, the Reserve Bank of Zimbabwe (RBZ) has positioned ZiG as the anchor of a future single-currency regime. Electronic usage reportedly climbed to about 40% by mid‑2025, and inflation has moderated compared to previous spikes. Authorities argue this signals stability.

But stability has two forms:

1. Administrative stability – achieved through policy controls and interventions.
2. Market stability – earned through voluntary trust.

The IMF has suggested that the official exchange rate may be overvalued. When a currency is priced above what the market believes it is worth, distortions emerge: shortages, parallel markets, pricing confusion, and hedging behaviour.

Trust can not be declared, it must be demonstrated consistently over time.

Fuel as a Microcosm of the Economy

Fuel pricing reveals deeper economic mechanics:

• If fuel stations fear exchange loss, they quietly price using parallel benchmarks.
• If transporters anticipate depreciation, they increase fares pre-emptively.
• If wholesalers hedge, grocery prices rise even without official fuel increases.

This becomes a feedback loop: expectations of instability drive behaviours that reinforce instability. The core issue is not whether ZiG is quoted. It is whether it is trusted.

Austrian Economics Perspective: Why This Keeps Happening

a. Currency Value Is About Trust, Not Decree
Money survives through voluntary market acceptance. If individuals immediately convert ZiG to USD upon receiving it, that signals low confidence in its ability to preserve purchasing power. Money competes — if people are allowed to choose, they will hold the currency that best preserves value.

b. Intervention vs. Market Pricing

Exchange rate controls and administrative pricing distort price signals. When official rates diverge from lived reality, arbitrage opportunities emerge, informal markets expand, economic calculation becomes harder, and investment slows.

Sustainable currency stability requires tight control of money supply, fiscal discipline, no artificial exchange rate manipulation, and transparent reserve backing.

Transactability vs. Policy Aspiration

While ZERA’s petrol and diesel prices are quoted in ZiG, many fuel stations and service providers continue to reference US dollars or parallel market rates when selling fuel. Historical trends and consumer behavior indicate trust in the local currency remains cautious, particularly among informal traders and households.
Nevertheless, the question remains: Is ZiG genuinely shaping commercial behaviour, or is it still largely symbolic, useful in official pronouncements but insufficiently embedded in everyday transactions?

What Should Be Done

For Policymakers:

• Maintain strict monetary discipline, no excessive creation of ZiG.
• Allow transparent, market-driven exchange discovery.
• Strengthen fiscal discipline.
• Build reserves openly and verifiably.
• Ensure policy consistency; stability over time builds trust.

For Businesses:

• Hedge intelligently and price transparently.
• Improve operational efficiency.
• Avoid speculative panic adjustments.

For Ordinary Citizens:

• Budget with currency risk in mind.
• Diversify savings.
• Focus on income streams that hedge inflation.

Economic resilience starts at the household level.

The Deeper Reality

Zimbabwe’s economic crossroads is not just about fuel pricing. It is about whether ZiG becomes:

• A transactional instrument people tolerate, or
• A store of value people trust.

Fuel prices are a monthly reminder of that tension. When a currency becomes widely used because it is preferred, not just required, monetary reform succeeds. Until then, every fuel announcement remains more than a price list, it is a quiet referendum on monetary confidence.

Tinotenda Bhunu is an economist and emerging thought leader specializing in economic policy, entrepreneurship, and development in fragile economies. With a sharp focus on market reforms, private property rights, and sustainable growth, he transforms complex economic challenges into actionable solutions that empower communities and shape the future of Zimbabwe and Africa.