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ERB increases fuel prices due to global oil price surge and kwacha depreciation

The Energy Regulation Board (ERB) has increased the prices of petrol, diesel, and Jet A-1 fuel in Zambia, effective September 1, 2023. The increase is due to rising international oil prices and the depreciation of the Zambian kwacha.

The price of petrol has increased by K3.85 per litre, from K25.57 to K29.42 per litre. Diesel has increased by K3.52 per litre, from K23.36 to K26.88 per litre. Jet A-1 fuel has increased by K3.86 per litre, from K22.56 to K26.42 per litre.

ERB board chairperson Reynold Bowa said the main drivers for the increase were the movements in international oil prices and the exchange rate.

“The price of oil on the international market has increased between the August 2023 and the current price review for September 2023,” Bowa said. “Specifically, the average prices of petrol, diesel, and kerosene increased by 12.3%, 20.64%, and 20.02%, respectively.”

Bowa said the increase in international oil prices was attributed to tight oil supply on the market as the world’s biggest exporters announced an extension to production cuts to October. He also said there was reduced crude oil supply from production areas in the Gulf of Mexico due to tropical storms and expected hurricanes in the region.

Bowa said the depreciation of the kwacha against the US dollar also contributed to the increase in fuel prices. In August, the monthly average exchange rate of the kwacha to the US dollar depreciated from K18.42 to K19.42.

“The two key fundamentals that affect the price of fuel in Zambia moved in the same adverse direction,” Bowa said. “That is, prices of oil increased while the exchange rate depreciated against the US dollar. This situation has put upward pressure on domestic prices of fuel.”

Bowa said the ERB had suspended the revision of kerosene prices because the country had more than enough stocks. He also said that although oil marketing companies (OMCs) could compute expected prices, it was not legal for them to hoard fuel prior to the announcement of prices.

The increase in fuel prices is likely to have a significant impact on the cost of living in Zambia. Transport costs are likely to rise, which could put pressure on businesses and consumers. The government has said it is working to mitigate the impact of the increase.


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