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HomeNewsOMCs EXPECT FUEL PRICES TO REMAIN FAIR

OMCs EXPECT FUEL PRICES TO REMAIN FAIR

THE pump price of fuel will still remain reasonably fair even after Government withdraws the tax waiver for Value Added Tax (VAT) as well as excise and customs duties on imported petroleum products.

Oil Marketing Companies Association of Zambia (OMCAZ) President Kafula Mubunga believes the gains the Kwacha has made in recent weeks against major convertible currencies and the reduced prices of crude oil on the world market will peg the fuel pump price in Zambia fairly.

“The Kwacha has gained,” Dr. Mubunga said in an interview. “The price of crude is about US$115 a barrel to US$120 a barrel among other factors that would necessitate the Government withdrawing the waiver so that it begins to collect it’s revenues or taxes in that respect.”

Ministry of Energy Permanent Secretary Francesca Zyambo informed Oil Marketing Companies (OMCs) in a letter of September 7 this time year that it will not extend the waiver on VAT, excise duty and customs duty on imported petroleum products when it expires on September 30 this year.

“Suffice to say these taxes affect the pricing of fuel so badly,” Dr. Mubunga said. “Zambia will still remain competitive in the region because the Kwacha has performed extremely well.
“The price of crude oil is coming down, so from whatever perspective you are going to look at it, Zambia will still have the fairest pump prices because of those factors alluded to.
“Yes, we welcome the move and Support the Government.”

Government has engaged OMCs to import petroleum products into the country after stopping the importation of crude Oil for Refinery Plant in Ndola.

Petroleum Transporters Association of Zambia (PTAZ) Secretary Benson Tembo said the removal of taxes on the importation of petroleum products will result in an upward adjustment of pump price of fuel.

“We are one of the biggest consumers of fuel in the country, we have a lot of trucks that are moving locally and crossing borders,” he said.

“So if VAT is reintroduced, we are expecting a slight upward adjustment to the pump price of fuel which will trigger a high cost of doing business in Zambia.”

Energy Regulation Board (ERB) reviews the pump price of fuel monthly and the next announcement is expected on September 30, the day the waiver on imported petroleum products will expire.
The current pump prices are K21.54 petroleum K23.12 for diesel and K16.71 Kerosene.

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