By Fred M’membe President of the Socialist Party
At the time the UPND was taking over government the prices of petrol and diesel were K17.62 and K17.82 respectively. Today under the UPND government the prices of petrol and diesel are K21.96 and K21.54 respectively.
Last month there was hope of a reversal of fortunes when the prices of petrol and diesel were reduced by K1.32 and K 3.36 respectively. Today the cumulative increase in the prices of petrol and diesel since the UPND came to power stands at K 4.34 and K3.72 respectively.
In their election campaigns the UPND leadership had promised to reduce fuel prices by K4.02.
As we have stated before, today the UPND government faces a dilemma of how to honour their election promise of cutting fuel prices in the light of the International Monetary Fund (IMF) conditionality with the net effect of increasing fuel prices.
On Tuesday, January 25, 2022, the Energy Regulatory Board announced that they were migrating to a thirty day pricing cycle for petrol, diesel and low sulphur gas oil. And in that regard, fuel prices would now be reviewed every month starting with January, 2022.
We warned that it was highly unlikely that fuel prices will be reduced at these reviews – they will instead be increased. And this may further stoke public outrage over the high living expenses.
In the light of their IMF commitments, we can’t see any sensible measures that they can take to help reduce fuel prices in an effort to honour their campaign promise of affordable fuel and defuse public anger. The price of fuel has a significant weighting in the basket of goods and services that are used to measure inflation in the country. Producers of services and goods are also expected to factor in the higher cost of fuel. This makes fuel prices a key determinant of the rate of inflation.
The economy also uses diesel for transportation, power generation and running of agricultural machinery such as tractors, with a direct impact on the cost of farm produce. At the individual level, higher fuel prices mean that each of us pays more at the filling station, leaving less to spend on other goods and services. But higher fuel prices affect more than just the cost to fill up at the filling station; higher fuel prices have an effect on the broader economy. Inversely, when fuel prices fall, it is cheaper to fill up the tank for both households and businesses, and really eases costs on transportation-focused industries like trucking and buses – but it also puts a damper on the domestic fuel industry.
In general, higher fuel prices are a drag on the economy. When fuel prices rise, it can be a drag on the economy – impacting everything from consumer spending to bus fares to hiring practices. Fuel is an important input for transportation, which directly impacts households as they drive, but also businesses that rely on logistics and transportation chains. If discretionary spending is hampered by higher fuel costs, it can have knock-on effects throughout the broader economy.
A side effect of high fuel prices is that the discretionary spending of consumers drops as they spend a relatively larger portion of their income on fuel. Higher fuel prices also mean that shoppers will tend to drive less – including to places like the mall or shopping centers.
All retailers are further squeezed as they are forced to pass on the higher expenses they also experience, which are associated with increased shipping costs to consumers. Anything that has to be transported could cost more as fuel prices rise. Likewise, many products that contain plastics or synthetic materials are based in part on petroleum. Higher fuel prices mean higher prices for these materials too.
Rising fuel prices will negatively impact efforts at economic recovery in terms of hiring practices. Rising fuel prices will force some businesses to re-evaluate their hiring plans, holding off because they are uncertain about the economy’s health. Less discretionary spending results in decreased sales, both of which can influence a company’s ability to hire.
Many job candidates have to weigh prospective positions against the costs associated with the commute. Some workers who have been offered new jobs have been forced to turn down the position simply because the costs to get to and from work would eat up such a large percentage of the salary. There is an undeniable correlation between consumer confidence, spending habits, and fuel prices. Increases in fuel prices makes people feel more pessimistic about the economy.
Going up, up and up.
Membe is becoming boring……….
If even the USA , a major producer of oil is increasing the price of fuel by an average of 10 cents ,………….
What do you expect of zambia ???
It’s NEW DOOM mwe bantu.
In USA we paying K20 per liter, not gallon, but Zambian liter.
Stop complaining.
Ghana cedi is now the worst-performing currency among Africa’s top currencies, according to Bloomberg. Bloomberg pegs the depreciation of the cedi to the dollar at 8.86% between January 1, 2022, and February 25, 2022.
This is followed by the Zambian kwacha with a depreciation of 6.02%.
#4 Nostradamus… income levels are different. That’s one dollar per liter which is affordable by US standards.
Let zambians suffer since they voted for change Hahaha. Me i am not affected. Mwanyala
This article proves once and for all that Fred has been living under a stone and has got no idea what’s going on in the world. Fred, there is a WAR going on and subsequently the oil prices have shot up. Nothing the New Dawn (or the Old Dawn, or any Dawn) government can do about it. So stop miauwing, you behave like a two year old!
M’membe you are not in government and you don’t know how to rule, you job is to criticise only
Have we now started comparing prices in Zambia to those obtaining in the USA. Lets go further and also compare salaries. How much does a primary (elementary ) school teacher earn in the USA ? During campaigns, Zambians were told the prices of fuel were going to come down by K 4.00. A drop in the price of fuel is what the average voter expected. Instead the prices are going up and instead of offering a plausible explanation, why the prices are going up some one is waffling about the war in Ukraine . We told you, “running a country is not easy”. Nipano tuli!
WHY DOESNT THIS CHAP GIVE UP
HE REALLY HAS NOTHING TO OFFER ZAMBIA SOCIALISM IS A NON STARTER
AND HE HOLDS CUBA AS AN EXAMPLE ?? KIKIKI
MOST PEOPLE NOW UNDERSTAND THE WORLD ECONOMY AND WE ARE DEPENDANT ON WORLD OIL PRICES
ONLY PF STOOGES HAVE NOTHING BETTER TO OFFER SO THE JUST CRITISE FOR THE SAKE OF IT
Sir don’t try to make points where it’s not necessary. It’s not UPND that is causing gas to go up. This is a worldwide problem. Do not make it political. You look stupid, it’s like you are not thinking straight and don’t see and hear what is going on in the world. This is a least thing that will come from a person like you. Please don’t sink that low.
Meanwhile has anyone seen the list of youths stranded in Ukraine. It was published on Zambian Observer, 97% all from two regions – Northern and Eastern.
Fred, you are now irrelevant in the political discourse of this country. Lungu was right to shut your paper down because you lost your senses ever since you tasted a bit of ‘power’ under the sleeping Sata. You are trying to hide under the “socialist” banner when you are nothing but a blood sucker. With all your educational certifications, you still don’t understand the moving parts in the economy that affect the price of fuel?! Well, if your jealousy of HH is eating you up big time, you have another 9 years to go of ‘hating’. Wish you luck, my guy.
If you speak against the current government you top on LT news, as Emmanuel Mwamba is their chief remote editor. LT benefited a lot from PF and they should dying with it soon, no wonder pops are everywhere, they can’t pay for filters anymore, if anything this not a paid for website, paid for website have pop-up filters etc but this looks like a volunteered or those “Design your own website, for free”.