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Tuesday, January 25, 2022
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HomeNews'Fuel hike quick, Shocking'

‘Fuel hike quick, Shocking’

By STEVEN ZANDE AND FRANCISCA CHOMBA

THE Zambia Consumer Association (ZACA) says yesterday’s decision by energu Regulation Board (ERB) to increase fuel pump prices is “too quick and shocking” to consumers.

ERB announced yesterday hat effective midnight the pump price for petrol had increased by K3.54 from 17.72 to 21.16 while that of diesel had gone up by K4.56 to cost K20.15 from K15.59 per litre .

Low Sulphur Gasoline (KLSG) had gone up by K4.47 from K17.82 to K 222.29 per litre, while the price of Kerosene at K15.39 per litre.

The adjustments were triggered by the removal of Government subsidies and tax incentives on petroleum products.

ERB board chairperson Remolds Bowa announced at a press Briefing in Lusaka yesterday that the price adjustment took into account the international oil prices and the exchange rate.

Mr Bowa told journalists in Lusaka yesterday that the pricing trigger band of 2.5 per cent change into wholesale prices would be maintained in order to allow for price stability within the new pricing cycle.

He said going forward ERB would start reviewing petroleum prices every 30 days as opposed to the 60 day period.

“Notably the last price adjustment was at an exchange rate of K14.50/USD, while the average international oil prices were about USD70/bbl. These levels have since been surpassed. This therefore has made it inevitable that both the wholesale and retail pump prices be adjusted, “ Mr Bowa said.

Mr Bowa said the board also proposed to the Government that it continued with the current tax relief on petroleum products such that Value Added Tax being zero related, as opposed to being at 16% and the Exercise Duty being reduced from K2.07 per litre on petrol, while for diesel and LSG both moving from 0.66 per litre to 0.00 per litre.

He warned Oil Marketing Companies that it is against the license condition to hoard fuel, further advising members of the public to be on the lookout and report any retail facilities that practiced the illegality and report through the toll free line #8484.

The current pump price has been kept artificial since December 26, 2019, depite adverse movements in the key fundamentals which, if implemented, would have led to steep price increased from December 2019 to date,” he added.

He said this was only cushioned by the introduction of petroleum subsidies, accompanied by reduction of taxes in the pump price.

Meanwhile, Mr Bowa has expressed optimism that with the positive economic outlook and the continued appreciation of the Kwacha, future price adjustment would be moderated.

Reacting to the development, ZACA executive secretary Juba Sakala accused ERB of “backstabbing” consumers.

Mr Sakal said in interview that Zambians expected a fuel price in January, at the start of 22 Budget cycle.

Mr Sakala said fuel price adjustment would quickly lead to a sharp rise in cost of other commodities

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