Saturday, June 15, 2024

Downside of Monthly Fuel Reviews

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The monthly fuel price reviews may be fine in principle and academic theory, but they assume a rational response from all stakeholders. They assume that pump prices will be increased proportionally when supply prices are increased and vice versa.

The downside however, is that pump prices are proportionally increased when a supply hike happens but the reverse does not follow. When supply prices are reduced, most businesses retain the revised hiked pump prices when the increase occurred.

So the assumption of a rational response does not hold. At the end of the day the consumer is continuously bearing the brunt of continuous price hikes. It makes planning for businesses very cumbersome as they have to adjust prices every month.

Please abandon the monthly price reviews and revert to the old system. It’s too complex for a country like Zambia.

Fred M’membe
President of the Socialist Party

8 COMMENTS

  1. There’s absolutely nothing good about this nonsense in any way.
    Example reducing bus fares when fuel prices are reduced doesn’t take into account that other inputs still maintain the high prices.

  2. The failure to find mechanisms to sustain a stable price of fuel for a long time by the New Doom is indicative of the limited thinking capacity within their ranks. The shocks these fluctuations are sending into the economy far outweigh whatever little benefits, if any, that may exist. Can you reopen Indeni and revert to the bulk procurement of fuel as a purchase of stocks to last up to 6 six months is likely to maintain the same prices for the whole duration as there’s unlikely to be a reason to adjust

    • @Deja Vi, when you talk to former workers at Indeni what they say is that the closure of the refinery wasn’t in public interest. It’s for the narrow interest of protecting the surviving partner in Ndola Energy the company that used to get heavy fuel oils for free. Indeni was insolvent because of some of those debts. When some manager tried to reconcile to push for the recovery the plant was swiftly put on care and maintenance. One these things will come to light and heads shall roll

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  3. It is good so that we get a fair and accurate price. Long gone are the pf days of fake subsidies used to hide the true status of failing economy

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    • You make me laugh. The master told us that K17.00 was too high because the PF were stealing the K7.00 difference of the real price. So where’s the subsidy here? When tell the truth you don’t need a good memory.

  4. So at least once a month, grown men and women sit in front of national television to announce fuel prices that could easily be posted on a website? Zambia will never develop.

  5. The monthly statistics appears not to work because Lusaka distorts statics.
    Let the 51000 come to constituencies. That will mean roughly 326 per each constituency.
    The monthly statics will show more value.

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