Thursday, May 30, 2024

The huge increment in fuel pump prices will swallow the economic gains

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Social economist and business consultant Kelvin Chisanga says the huge increment in fuel pump prices will swallow the economic gains Zambia has made in recent months.

The Energy Regulation Board (ERB) has adjusted upwards the pump prices of petroleum products by K4.54/litre for Petrol, K4.68/litre for Diesel and K3.93/litre for Kerosene.

ERB Board Chairperson Reynolds Bowa yesterday said the increase in pump prices is due to the continued strain in global oil supply mainly due to the geopolitical conflict between Russia and Ukraine that has exerted additional pressure on the already escalating oil prices on the international market.

He said these developments have heightened the demand for petroleum products and have increased the cost of importation.

Mr. Bowa explained that prices of finished products on the international markets have gone up steeply and continue to trade above US$ 130/barrel, while on the domestic market, the impact would have been more adverse had it not been for the resilience and marginal appreciation of the Kwacha against the United States Dollar, during the review period.

But Mr. Chisanga has described the increase of fuel prices by a margin of over Four Kwacha as huge.

He said that hiked fuel prices will increase inflation rate and weaken the Kwacha further.

The latest increase means one can only buy three litres of petrol from K100 which is the highest note in the country.

Mr. Chisanga reiterated that the Government should remove fuel levy as one way of stabilizing fuel prices has fluctuated in the last four five months.

“Fuel increment to disturb key current economic performances! As expected from the onset, fuel goes on an upward adjustment tonight, signaling with a big marginal value in its price growth, and as I said this is capable of pushing inflation up for this particular month and fuel in this case remains strongly a possible inflation driver. However, this act of imbalance in the global supply of oil commodity, will strongly aggregate some disorder or realignments in the structural process of the economic path-line, as we are now disturbed to foster a steady domestic growth that we are firmly sure of building up for Zambia,” Mr. Chisanga said.

He said there is a need to come up with strategies of reducing the demanding pressure for all petroleum products.

“It’s like, each time we are looking to get through, on the top economic line of growth then we have something comes up to dismantle all our interesting projections and putative efforts. In economics, we have what we call “shocks” which are usually and basically difficult to control such as COVID-19, fuel supply chain etc but we can build up something to help salvo certain effects that can be incentivized with some relatively good plans,” Mr. Chisanga said.

“With a case of fuel or oil commodity, we seriously need to disband “fuel levy” and change it into “Stabilisation and Recovery Levy” which should be used to cool the demanding pressure for all petroleum products.”

6 COMMENTS

  1. Chisanga clearly doesn’t understand that the oil prices are dictated by the global oil index. And that he should direct his complaints to Mr Putin, as it is HIS war that is behind the fuel hike. Get an electric car and get SOLAR!

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  2. So Zambia is at the front line in Ukraine? How come we are the only African country affected by this war.

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  3. No economic gain things are worse than 2021. I saw kz smiling with the former ps at a filling station. Today he is not commenting

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