Opposition Socialist Party leader Dr Fred M’membe has charged that the reduction in pump price of petroleum products announced on 31st January, 2022 is not exciting.
The Energy Regulation Board (ERB) has reduced the pump price of petroleum products by K1.32 for petrol and K1.22 Ngwee per litre for diesel which will now be sold as low Sulphur Gas oil.
The Price of kerosene remains unchanged as Petrol will now be sold at K19.84 from the old K21.16 ngwee and Diesel which is now low sulphur will be sold at K18.93 ngwee, kerosene will be sold at K15.39 ngwee per litre.
When announcing the new development, ERB Board Chairperson Reynolds Bowa said that the price review has been necessitated by the decision to migrate to a monthly pricing cycle which entails that the local price of fuel is more responsive to the market fundamentals.
Featuring on Radio Phoenix’s Let the People Talk Show on Tuesday morning, Dr. M’membe said the margin at which prices have been reduced is small compared to the increment made in December.
He predicted that the fuel price reduction won’t trigger a reduction in prices of goods and services.
“You increase something by K10 after a few days you reduce it by K2. Have you reduced it? You have not reduced. If you have to reduce, maybe you have to take away the K10 and maybe reduce it by K11. Then you have reduced. If you increase a few days you have not reduced anything. The prices of fuel have not been reduced. They (Government) are saying the fuel prices will be determined by economic factors, the exchange rate of the Kwacha. When the Kwacha is appreciating the fuel prices will go down. When the Kwacha is depreciating the fuel prices will go up, inflation and so on,” Dr. M’membe said.
“Today the Kwacha is depreciating so we expect on the 28th of February to have another fuel increment because the Kwacha is depreciating, if they have to keep the same approach, if they are to base their decision on the same factors. So the K1 or so which they have knocked out from fuel prices will be back. The price of fuel has not come down. It is not below the increment. Look, they have told us, they have not hidden the mechanisms or the elements that determine that. One of them is the value of Kwacha, it was appreciating a little bit in the previous month but it is depreciating now so this reduction cannot be celebrated and it destabilizes because next month you will have an increment if they follow the same thing. If they are not using other factors they have not told us. If they are not political decisions that determine the price, it is bound to increase. Bus fares will not reduce, food prices will not reduce,” he said.
Dr. M’membe spoke against the decision to review fuel prices in Zambia on a monthly basis.
He said it will be tough for the business community to determine prices of goods and services or plan when the prices of fuel are not stable.
“South Africa is doing it (reviewing fuel prices monthly) but it is not doing it across all the petroleum products. They are doing it on petrol and kerosene I think. They are not doing it on diesel; they are not doing it on diesel because part of diesel that South Africa produces is from its own coal. And there is a law in South Africa that does not allow you to import diesel and sell it directly, you have to mix it with local diesel. So there is stability in the diesel prices in South Africa,” Dr. M’membe said.
“The diesel is not part of the monthly reviews that they (South Africa) carry. They only carry it on petrol and I think on kerosene and also to do that you need also to have certain economic parameters. Your exchange rate should not be shifting that high or fluctuating that high. Your inflation should be under control, your macroeconomic stability should be there,” he concluded.