For the first time in Zimbabwe's history it is legal to buy fuel in foreign currency. Selected gas stations in Zimbabwe are accepting U.S. dollars for fuel.
Six gas stations around the country have been granted the privilege of selling fuel for foreign currency. Fuel is selling for one U.S. dollar per liter, for the lucky few able to afford to buy foreign currency on the black market.
A U.S. dollar is available on the black market for about 45,000 Zimbabwe dollars.
If fuel was available at gas stations in Zimbabwe dollars, which it is not, it would cost a quarter of that.
There are permanent fuel lines outside gas stations all over Zimbabwe, as most people cannot afford to buy foreign currency. There is none available at the Central Bank.
Daniel Ndlela, an economic consultant who also works in the region, says the use of U.S. dollars for fuel marks the collapse of the economy.
"According to Zimbabwe laws, the use of foreign currency is actually illegal," he said. "This dollarization we are beginning to see in Zimbabwe today is not a normal dollarization, it is actually back door dollarization, the type we have seen in all economies which are either in conflict or failed economies, that we saw in Mozambique in the 80s and 90s. We saw it in Rwanda, Burundi, DRC, Congo, Somalia, in West Africa in Liberia, in Sierra Leone, when the currency is used by the powerful few at the expense of the other economy."
Mr. Ndlela says that the gas stations chosen to sell fuel at foreign currency belong to members of the ruling Zanu-PF elite, including a member of parliament. He says only the elite will survive the economic meltdown.
"There was no selection process it was simply announced in the last monetary policy review by the governor of the central bank," adds Mr. Ndlela. "Those garages that are now having fuel available, selling the fuel at one dollar U.S. a liter, simply means that the chosen few are now the ones who have access to the fuel, access to the foreign currency and are going to profiteer at the expense of public. The public is not expected to have money to buy that fuel.
The central bank declined to answer questions about how gas stations selling fuel in U.S. dollars were chosen.
This week the government announced that inflation had made its biggest single jump in one month and surged 47 percent in July, bringing the annual rate to 259 percent. Most economists predict inflation will reach between 500 and 1,000 by year's end.