Thursday, June 20, 2024

Kwacha Depreciation and Increase in Oil Price pushes ERB increases to increase fuel Pump Price

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Energy Regulation Board (ERB) has adjusted upwards the pump price of petrol by K1.30 per litre, while the pump price of diesel and kerosene have remained unchanged.

Announcing the fuel prices for the month of March, ERB Board Chairperson, Reynolds Bowa said the new price of petrol will now be at K28.52 from K27.22, effective midnight March 1, 2023.

Mr Bowa indicated that the pump price for low Sulphur diesel remains at K29.25, Kerosene is also maintained at K22.29 and Jet A-1 at Kenneth Kaunda International Airport remains unchanged at K25.34.

He explained that the increase in the pump price for petrol is attributed to the depreciation of the local currency from an average of K18.90 per one United states dollar to K19.40 representing 2.65 per cent and the increase in the international oil market for petrol from 87.95 United States Dollars per balle in February, to 92.58 United States Dollars per balle for the month of March.

Mr Bowa further said the prices of diesel and kerosene have been maintained because the prices of the products at the international market were 108.96 per balle and Kerosene was 108.66 per balle respectively compared to 106.28 and 106.01 per balle respectively for March representing a decline of 2.45 per cent and 2.44 per for diesel and Kerosene respectively.

‘’The international oil prices remained high during the month of February and the sustained high oil prices are attributed to a combination of factors such as the continued world inflation and recession fears coupled with continued speculation of further Russian oil production cuts,’’ he said.

He stated that the depreciation of the local currency was mainly attributed to low foreign exchange supply especially from the mining sector amidst high demand by market players.

“Furthermore the continued depreciation was caused by tighter global uncertainty in financial conditions and negative sentiments associated with the extended debt restructuring negotiations for Zambia,’’ he explained.

18 COMMENTS

  1. We are sworn in at 10 hours, at 14 hours the kwacha appreciates. Where is the calculator?

    Stop persecuting PF and Churches and focus on issues affecting Zambians especially the poor Zambians. Zambians are clever enough to know that you want to believe that PF has messed up the economy and yet you have failed.

    Anyway forgive him, he is a trainee president. Governance is very difficult without team work.

  2. Instead of pointless criticism bring workable solutions to the table. I for one am very disappointed with the Economist and Financial Analyst community in Zambia for not engaging both the Bank of Zambia and Ministry of finance on this most critical economic factor of the exchange rate.Going forward we need to do a few things:

    1. Controls on FOREX going out (stop quoting prices for local goods and services in USD)

    2. The govt should frantically encourage export of all goods (no restrictions on maize and soya bean exports from this years crop) and services (more remittances from the diaspora should be encouraged) inorder for this nation to earn more FOREX.

  3. Ctn…
    3. Investigate insider trading that might be occuring within the commercial banks and central banks, there are possibly some hoarding USD knowing very well when the exchange rate will change, these tend to benefit when the Kwacha is at its weakest.They benefit at the cost of the national economy.The nation cannot continue on this trajectory on an exchange rate that depreciates on a daily basis, to do so is to ask for total economic failure, a departure of trust and confidence in the economy. No one will ever put their money in fixed deposit accounts or buy govt securities because the value if the local currency will devalue greatly by the time your investment matures.

    Let us be wise, proactive and tackle the exchange rate conundrum now!

  4. Correction on second comment, 6th line from the bottom “of” instead of “if”

    Ctn…
    4. Overtures to our greatest creditor China must be made, the IMF and the West are clearly not on our side it appears. Whilst billions of USD are being provided by the IMF in other parts of the world where people have a lighter skin tone they are withholding this $1.3 billion on the premise that we Zambia must first restructure our sovereign debt crisis with both private bond holders and foreign governments such as China whom we are owing the largest debt.

  5. Ctn…
    We need to seperate the two or rather entirely abandon the IMF deal in place of seeking favour from China who have been there for Zambia when the IMF wouldn’t even lend us a single penny. Forget IMF and let’s get our business relations right with China.

  6. All regional currencies have depreciated recently, including the Rand. It is more of Dollar strength than anything about Bally or the UPND.

    • Not an entirely true statement. The ZAR was at R17.5 and the ZMW at K15.5 to the USD four months ago. Today it ZMW is at K20 and the ZAR is at R18.15 to the USD the percentage difference is too high on the Zambian Kwacha.

  7. Yes, the Zambian economy is facing some challenges, including a high level of public debt, low foreign exchange reserves, and a narrow export base. However, there are efforts underway to address these issues and promote economic growth and stability. It will take time, but with a combination of government policies, private sector investment, and individual actions, the Zambian economy can recover and thrive in the long run.

  8. kkkkkkkkk fimba upoooke tuleyatuleya you can go again up to k30.Your target is k30 better you go up to k35 because it is still cheap.And that is the way parties decampany themselves wait and see 2026 is drawing near, mmmmm mwafilwa bwangu.This was suppose to start happening after 5 years not now,mmmmm too bad any way.

  9. Bring back ngandu magande as finance minister and Caleb fundanga as governor. That team did wonders with the exchange rate.

  10. Oh yes, but the major problem I have with all these charges that occur in this modern Zambian era is that the way the announcements are made to some of these charges is absurd, it’s like dreaming of something overnight and you say to yourself that I’m going to do it anyway without any consideration what so ever. I know things economically are stuck worldwide, what I mean is that some of the charges come at a very short random time which really and truly confuses and stresses mostly people who have vehicles!! isn’t really a good idea to make charges prior so that you give time to ppl who are going to get affected by these charges to prepare for these charges rather than just make the charges effective, Ppl also need to plan for the charges. just a patriotic citizen concern!!!!

  11. yeah, hahaha i was reading my own comments and rectified a misspelling of the word charges instead of changes if you have noticed yeah, but that is English for you hahaha

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