Opposition leader Hakainde Hichilema has charged that the principle reason why fuel pimp prices are very high in Zambia is because of corruption and too many middle men in the supply chain.
Commenting on the increase in fuel pump prices by average of 80 Ngwee, Mr Hichilema charged that the hike is a slap in the face of already struggling Zambians.
“As if the cost of living is not already high enough, PF comes in with another slap in the face of the citizenry, sending all of us reeling to the floor,” Mr Hichilema said.
“Fuel in Zambia is expensive basically because of three factors; the kwacha/dollar exchange rate which has deteriorated due to debt repayments. Secondly, we have a chain of middle men who have no business buying fuel, and thirdly are the exorbitant fees charged by Indeni which can be circumvented, if oil marketing companies were allowed to import a finished product.”
He added, “The Tazama pipeline has leakage problems that we have failed to maintain it, but you the people of Zambia are being exploited to attend to these avoidable charges.”
“How does petrol which costs K9.49 at wholesale end up K15.98 at the pump? Where does the K6.49 go to? The answer is simple; PF middle men, unnecessary fees and outright theft by a lot of people along the way to the pump price.”
He stated that other than transport costs, there is no other justifiable reason why fuel must be sold this expensive in Zambia apart from outright theft by the PF and its cohorts.
“This is not a joking matter any more fellow citizens. Zambia is in extraordinary circumstances, and extraordinary measures must be taken now and not tomorrow by all of us and those entrusted with the power to make decisions,” he said.
“Typically, our fuel has seven tax components by the time it lands at the pump i.e fuel terminal fee, marking fee, excise duty, dealer margin, ERB Fees, Strategic Reserve Fund and finally VAT which is not calculated at wholesale price but at the total price, after adding all the other taxes.”
He said, “This simply means there’s a double count here and this is the reason our price of fuel is very high. What do we then propose? For now, can PF scrap all the other taxes and allow Oil Marketing Companies to import fuel as a finished product from reliable and credible sources.”
“Here is what is happening [Base Price + Fuel Terminal Fee (Tax) + Marking Fee (Tax) + Excise Duty (Tax) + Transport + OMC Margin + Dealer Margin (Tax) + ERB Fees (Tax) + Strategic Reserves Fund (Tax)] then this subtotal is subjected to VAT at 16% (Tax).”
Mr. Hichilema said the UPND expected the PF to do was to reduce the pump price of fuel by not less than 4 Kwacha per litre.