THE Government has initiated a mechanism of reviewing fuel prices bimonthly, in response to the shifting market fundamentals that affect the wholesale and retail costs of the commodity.
Energy Minister David Mabumba said petroleum prices would be reviewed every two months and adjusted based on the performance of the Kwacha against other convertible currencies and international market of oil prices.
The Energy Regulation Board (ERB) this month reduced pump prices for fuel by K1.20 for petrol, 68 Ngwee for diesel, K1.22 for kerosene and low sulphur gas by 68 Ngwee.
This meant that the new price for petrol was K12.50 per litre from K13.70, diesel K10.72 per litre from K11.40, kerosene K6.81 per litre from K8.03 and low sulphur gas K13.01 per litre from K13.69 per litre.
Mr Mabumba said the next petroleum price review was anticipated in March and the outcome would be determined by how the Kwacha and international oil prices would perform.
“Fuel prices will be reviewed every 60 days and adjusted upwardly or downwards in response to the behaviour of the domestic exchange rate and international oil prices.
“This mechanism is being implemented to address delays in reviewing the prices, a scenario which in some instances denied consumers benefit when market fundamentals were stable,” Mr Mabumba said.
He said the public should respond favourably in case of an upward adjustment to the cost of the commodity as such a decision would be made if market forces were unfavourable and not that the Government was sadist.
Mr Mabumba said the Government had so far covered three provinces out of 10, consulting stakeholders on its proposal to leave fuel importation and distribution solely with the private sector.
He said the process was progressing well and envisaged to culminate in a situation where the private sector managed fuel importation and distribution, while the Government provided legislation to supervise the sector.