“STOP spending $1 million per day on subsidizing the pump price of fuel because it is unsustainable”, the Parliamentary Committee on Estimates has urged Government.
Speaking on behalf of the committee, former Vice President Dr Guy Scott told Parliament that the process of migrating to cost reflective fuel pump prices should be expedited.
Government asked Parliament to approve K3.6 trillion as supplementary provision warrant expenditure on fuel subsidy for the remainder of the 2016 fiscal year, translating into $1 million expenditure per day.
Dr Scott said the approval of the supplementary provision warrant was a continuation of the subsidy on the pump price of fuel.
Committee on Estimates chairman Highvie Hamududu had moved a motion on Thursday to adopt the report of his committee on the supplementary provision warrant no. 2 of 2016.
But Dr Scott told the House: “This is unsustainable and your committee, therefore, recommends that the process of migrating to cost reflective fuel pump price be expedited.”
He called for increased austerity in Government operations so as to make savings and reduce the levels of expenditure.
“Both these measures would contribute to easing the pressure on the national Budget,” Dr Scott said.
He said Finance Minister Alexander Chikwanda had explained that the K3.6 trillion contained in the warrant was the expected total expenditure on fuel subsidy for the remainder of the 2016 fiscal year assuming that there would be no major movements in the exchange rate as such changes could spur further exchange losses and increase the fuel import bill in Kwacha terms.
“He (Chikwanda) added that if this expenditure was not incurred, Zambia’s ability to import fuel supplies going forward would be in jeopardy, with dire consequences on both the economy and the day to day lives of ordinary citizens,” Dr Scott said.
He said during the meeting with Mr Chikwanda one of the issues discussed was the availability of funds for the said expenditure.
Dr Scott said the Committee on Estimates was informed by Mr Chikwanda that financing of the expenditure would come from existing budgetary provisions.
He said Mr Chikwanda admitted that the expenditure would entail a significant realignment of both recurrent and capital expenditures.
“Your committee, therefore, strongly urges the Minister of Finance to take measures to ensure that the impact of such realignment on critical services such as health care provision and education is minimised,” Dr Scott said.
He said Mr Chikwanda had explained to the Committee on Estimates that Zambia could not fully benefit from the decline in international oil prices because at the last increment of fuel pump prices, an exchange rate of about K7.5 to a dollar was assumed.
Dr Scott said Mr Chikwanda also started that Government was cognisant of the need to ensure fuel pump prices were cost reflective but that the adjustment would need to be phased over several months so as to cushion the inflationary effects that it could have on the economy as well as on the purchasing power of the citizens.
2016 vote PF (Edgar)
i thank you
You – Katondo Boys – can vote for your own suicide, I have more brains than that!
You are obviously mentally deficient!
VOTE UPND 11/8/2016!!!
We cant live on kaloba day & night!!
#Chagwamustfall!!!
I thank you.
After August 2016 expect this fuel, electricity to be cost reflective. For now it is a political suicide mistake and they (PF) know it and so they will do anything to prevent it.
So why is baby HH always saying the price must be reduced? He seems to just politic over everything and hence becoming irrelevant to us all.
IMF is here.
Soon these useless PF clowns will have inflation out of control AGAIN!
Zambians, be ready to have a completely useless Kwacha from a USELESS CLOWN of a President.
By August we will have the Kwacha REBASED again just to get rid of all the zeros!
Even if HH and Company came to power, they have little power to change the fuel price issue. ECL meanwhile
The middle men and their murky deals won’t care either was as long as they are not ratted out. The people will feel the increase in a very heart breaking way.
…either way
Don’t worry Guy Scott, IMF are putting that as part of the austerity package 🙂 and thats bye bye PF
what is true about dr scott is that he like bsh nono and the likes of gbm is that they belong to a clique of capitalist worshipers and firm believers in demandist approaches that dont give a damn what happens to the poor as long they ve their share.whatever their dislike for ecl they’re better off sharing looty ideas with hh
Without any Govt subsidy and importing finished petrol and diesel from South Africa, the pump price in Botswana is Us$0.70/ litre while in Zambia with a refinery and Govt subsidy, the pump price is Us$0.76/ litre. And we want to increase it further, what is making our fuel more expensive? Zambia is currently 7th in terms of fuel prices in the Southern Africa.
PF corruption and middlemen.
Dr Guyscot (muzungu opusa) , when we try to forget about him, he is at it again. His interest is for people to rise against the government. This time wailasha.
why should we hike fuel prices when oil prices is relatively CHEAP at the international market? Soo cheap that the market is flooded with oil? matter of fact the lowest it has ever been in nearly 10 year’s. something is off on how this fuel deals is being handled by our energy board. ONLY WAY
Mr Ken,
It is not about hiking but because our kwacha lost value against a dollar but we have maintained the price of fuel unchaged. Before kwacha was K7.00 per dollar and fuel was K7.50 but now the dollar is K12.00, so fuel also should increase as we buy it in dollars. But our lovely Govt has subsidy the cost in order to maintain the same price K7.50.
muzungu opusa, i agree with shonozi on this one
@cozzie, mj banda,
Imwe ba bili ndimwe bopusa !!!!
Just because he is muzungu doesnt make him to be opusa. He has done more for this country than the two of you.
So learn to respect !!! And no one is interested you showing off your stupidity.
Who benefits from subsidised fuel ? The rich of course. We need cost reflective prices . Then the government can devise social safety measures for the poor.
Just wait when IMF comes this year. Electricity and fuel will go up.
This PF govt need to be serious. Even a lay man like me in economics and investment politics know that there will be no significant appreciation of the Kwacha until after elections. No normal investor will bring in their dollars with this human rights and lawlessness & too much Presidential powers the country is experiencing. So expect no reduction in fuel pump price but most likely an increase. This is so because IMF next week will dictate the ECL team to reduce on subsidies. Fortunately, even useless trips will reduce. They will also be cautioned on human rights abuses.
Comment:The various activities associated with the
production of electricity from nuclear reactions
are referred to collectively as the nuclear fuel
cycle. The nuclear fuel cycle starts with the
mining of uranium and ends with the disposal of
nuclear waste. With the reprocessing of used fuel
as an option for nuclear energy, the stages form
a true cycle.
To prepare uranium for use in a nuclear reactor,
it undergoes the steps of mining and milling,
conversion, enrichment and fuel fabrication.
These steps make up the ‘front end’ of the
nuclear fuel cycle.
After uranium has spent about three years in a
reactor to produce electricity, the used fuel may
undergo a further series of steps including
temporary storage, reprocessing, and recycling
before wastes are disposed…
Just wait IMF is here. You will eat feces.
Say NO to the IMF and cosy more with China. IMF loans sucks!! Just to qualify for a bailout…. They will ask the government to include homo provisions in the current constitution…
Angola refused their loans… We can also do it too.
What Guy Scott is saying is that the government is subsdising to stay in power and they will stop soon after being elected back in. We need to see the face of government now. Then vote not because they are keeping prices of fuel low but because they can govern in a honest and sincere way. These guys are taking us for a ride in the dark ages.
That is the very reason Fossil Chikwanda wants to increase the debt ceiling…he doesnt care about the long term consequences!!
How these empty tins got it wrong is truly laughable …they removed subsidies then bought them back, they would be enjoying the benefits by now especially crude oil at an all time low, they had the opportunity to streamline the way crude is procured to reduce cost but got greedy with Kabimba, electricity tariffs is another one…when IMF comes they are not ***** they will make a taylor-made package and remove all subsidies and waste. I guess we never learned from the past.
Government is spending from the tax payers money to subsidize fuel. It is easy for Guy to say what he is saying, because this does not affect him. Whatever this means, Zambia must find a way to reduce suffering by common people; there must be a way!
He has just given you a solution..that’s the only way but your cadre head still chooses to insult him.
Why do we lack analytical skills amongst the citizenry?
The cost of fossil fuels is at it lowest, so why does GRZ subsidise? Would they subsidize if the Kwacha was at say K4/$?
Who shot the cost of dollar through the roof? That is where the hunting trail should start from…!! And it leads to one EC Lungu who has failed the economy and Zambia.