The Energy Regulation Board (ERB) has announced a significant reduction in the pump prices of petrol, diesel, kerosene, and Jet A-1 fuel, effective from June 1, 2023. The adjustment comes as a result of the decline in international oil prices and the depreciation of the Kwacha against the United States Dollar.
According to the latest price review by the ERB, petrol will now cost K3.14 less per liter, diesel will be K2.77 cheaper per liter, and kerosene will see a reduction of K0.73 per liter. These reductions reflect a decrease of 11.99% for petrol, 11.05% for diesel, and 7.78% for kerosene. Furthermore, the retail or Posted Airfield Price (PAP) of Jet A-1 at Kenneth Kaunda International Airport (KKIA) and other local airports has also been adjusted downwards.
The decline in international oil prices played a significant role in the reduction of fuel prices. During the previous price review in May 2023, the average prices of petrol, diesel, and kerosene on the global market were US$93.04/bbl, US$95.22/bbl, and US$92.72/bbl, respectively. In comparison, for the June 2023 fuel price review, the average prices dropped to US$81.88/bbl for petrol, US$84.70/bbl for diesel, and US$85.51/bbl for kerosene. These changes signify a notable decrease in prices across all fuel types.
Several factors contributed to the decline in oil prices, including concerns about a potential recession that impacted the oil and gas market. Additionally, fears of a banking crisis following the collapse of some Western banks further heightened uncertainty.
In tandem with the drop in international oil prices, the Kwacha experienced a depreciation of 0.49% against the United States Dollar from an average exchange rate of K18.47/US$ in April to K18.56/US$ in May 2023. This depreciation was mainly attributed to re-emerging foreign exchange market pressures.
However, the impact of the decrease in international oil prices outweighed the effects of the Kwacha’s depreciation against the United States Dollar. As a result, domestic fuel prices have seen a favorable adjustment, leading to the reduction in prices for petrol, diesel, kerosene, and Jet A-1.
Motorists and consumers across the country can now benefit from the lower fuel prices, which are expected to provide some relief from the high cost of living. The ERB encourages fuel suppliers and retailers to promptly implement the revised prices to ensure that consumers can access the benefits of these adjustments.
The determined changes in the national uniform pump prices for June 2023 are as follows:
- Petrol: K3.14/liter reduction
- Diesel: K2.77/liter reduction
- Kerosene: K0.73/liter reduction
- Jet A-1: Retail or Posted Airfield Price (PAP) adjustment at Kenneth Kaunda International Airport (KKIA) and other local airports.
The ERB remains committed to monitoring and regulating the energy sector to ensure fair and reasonable fuel prices for consumers while considering global market dynamics and exchange rate fluctuations.