The Energy Regulation Board (ERB) has reduced the pump price for Low Sulphur Gasoil (LSG) by K0.83 per litre which translates into 7.74 percent.
This is contained in a statement made available to ZANIS in Lusaka today by ERB Chairman Geoff Mwape.
Pastor Mwape announced that ERB is now mandated to determine the pump prices of LSG, a function previously performed by the Ministry of Mines, Energy and Water Development.
Pastor Mwape explained that the reduction had been prompted by low demand for the commodity exclusively imported for use by specialised industrial consumers.
He said customers require cleaner and environmentally friendly fuels therefore the ERB will set the price for LSG using principles of the Cost-plus Model.
Pastor Mwape said the pricing model operates on the principle that the final price of petroleum products covers all costs incurred in the supply chain.
He said therefore, the cost of LSG will be determined based on the cost of each consignment of the LSG imported.
Pastor Mwape pointed out that the cost of the consignment is mainly affected by global oil prices and the exchange rate of the Kwacha to the United States Dollar.
He said the consignment of LSG was purchased at a time when the international oil prices were still on a down ward trend.
The ERB Chairman said that this was consistent with the recent price adjustments for other petroleum products.
Pastor Mwape said the benefit of the continued drop in international oil prices is now being extended to the wholesale and pump price for LSG.