Government has maintained that the recent removal of subsidies and tax incentives on some petroleum products was inevitable as it was an important measure to actualizing the economic reform which Zambia is currently going through.
Director and Spokesperson in the Ministry of Information and Media, Thabo Kawana told ZANIS today that before the hike, the prices of petroleum products were artificial.
He said prices did not correspond with the trends on the international market and exchange rate.
Mr. Kawana explained that due to the continued subsiding of fuel prices, government was spending about 67 million United States Dollars per month and over US$ 800 million per year on fuel subsidies.
He added that government also accumulated a debt of US$500 million owed to Oil Marketing Companies for the supply of the commodity.
Mr. Kawana said the government had to take the hard decision of removing subsidies on fuel in order to save resources for other equally important sectors such as health and education.
He explained that the savings from the removal of subsidies and tax incentives on petroleum products will be allocated to the constituency development fund and used for the recruitment of teachers and health personnel in the country.
Mr. Kawana has, meanwhile, expressed optimism that once the economic reforms are done in the next two to three years, Zambians will feel the benefits of the decisions which are being undertaken currently.
He has since appealed to Zambians to exercise patience as government is working on restoring the economy that will result in improved development and wellbeing of people.
Last week, the Energy Regulation Board (ERB) announced an upward adjustment of pump prices of petroleum products between 3 Kwacha 54 Ngwee and 4 Kwacha 47 Ngwee following the removal of subsidies on the commodity.
Meanwhile, Economist Professor Oliver Saasa has urged the government to remove middlemen in fuel procurement in order to reduce the cost of the commodity following the removal of subsidies.
Professor Saasa said that the removal pf middlemen will also mean reviewing the tender process to ensure that the right bidders for the supply of fuel are awarded the contracts.
He said the government should also thoroughly explain why it was necessary to remove subsidies on fuel and electricity before its good intentions are misunderstood by the ordinary Zambians.
Professor Saasa said the recent removal of subsidies on fuel is a necessary evil which the country needed but said the government must also come up with measures which will help lessen the impact of such a move on ordinary Zambians.
Kawan was just appointed yesterday, today he is supporting removal of subsidise on fuel.
He went to say next two to three years, we will see reforms or economy picking. This means Zambians will suffer for three years.
The truth of the matter is that HH and the UPND could not accept paying $67 million per month to OMC’s who have ties to ECL and crooks like Lawyer Lewis Moosho who was given a huge contract to import fuel into Zambia.
They had to put a halt to the fraud.
This position is confusing indeed why can’t HH7 just fire that minister and then nominate this man…only keeping that woman in the name of gender balancing.
Total rubbish. Kawana is an ignorant cadre who knows nothing about oil procutement. No subsidy was ever aid by the pf government. Taxes were removed to cushion the increasing cost of fuel.
Remove kawana who just annoys role with his newly acquired airs it
This guy can support if people are told to eat faeces ati they are nutritious. I don’t expect him to say anything to the contrary.
Sick little weak boy. I can end this guys life with just one slap
Ba Kawana has had a lifeline extended to him through ka GRZ job. I am sure he will now even regain some of that weight he has been losing. Now he sees the removal of subsidies to be all right. Without that ka GRZ job, he would have melted like butter pa moto.
What is missing is explaining to the people exactly what, how, when? Speaking in abstracts won’t be helpful. By the way you forgot to address electricity.
So the national budget they announced of hiring teachers and health personnel was going to be funded from the removal of subsidies? Is that what the minister of Finance said during his budget presentation?
This fuel subsidies is such a huge issue and rather than sending his ‘chola boys’ to go and do the explaining, HH needs to got out and front the people of Zambia. Let him do a national press conference and articulate the issue and answer the questions directly.
Yes no country would every grow it’s economy if it has to rely on subsidies but the timing and implementation is crucial. Without putting in measure to cushion the…
…Without putting in measure to cushion the impact and protect the vulnerable it will be pain everywhere – it’s not just transport but even food and groceries will be impacted. Either create jobs quickly and/or give concessions to the elderly and most vulnerable in society.
By the way ‘Thabo’ should remove the ‘h’ in his name and correctly spell it as ‘Tabo’.. only South Africans add ‘h’ to their names of ‘Tabo’. Why is he insecure with his real name which means ‘Joy’ or ‘Happiness’ in Silozi?
PF debt gluttony and their toxic witchdoctor economics is what pushed Zambia into subsidies removal.
Why does he keep showing us his tongue.Is it a loose tongue
Bally has to hold a press conference and
Explain the sudden change from reducing
The prices to increasing the fuel prices as
He campaigned during elections.
Yes indeed he was appointed yesterday.
What then should the solution be to the $500 million debt?Where do we get the money $800milion to maintain or this case restore the subsidies.
Remember we’ve defaulted on Eurobonds and other loans.
Practical solutions are welcome,we all don’t want expensive fuel and power..