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ZAMBIANS should demand a more efficient fuel supply chain so that no amount of inefficiency costs are included in the fuel pump price, Zambia Association of Manufacturers (ZAM) has said.

ZAM executive officer, Florence Muleya Banda, said an efficient supply chain would enable Zambians benefit whenever there was an international price reduction because they would not be paying for inefficiencies.
Ms Banda said there had been increased public outcry regarding the high fuel prices in Zambia especially that other countries in the region had reduced their fuel pump prices.
This is because the price of crude oil per barrel fell to as low as $20.62 in March this year.
She however noted that the demand for a reduction in fuel price implied an increase in fuel subsidies on the part of Government.
Ms Banda said it was important to look at the determinants of fuel pricing in Zambia which included importation of crude oil products due to lack of a fuel refinery plant in the country.
Importation, she noted, attracted costs and the exchange rate of the dollar to the Kwacha as petroleum products were priced in dollars.
“While the price per barrel had reduced to $20.62 in March 2020, the exchange rate was averaging K18 in the same period and this meant that just on pricing alone before freight and insurance Zambia was buying the barrel at K371,” she said. Ms Banda pointed out that the Energy Regulations Board (ERB) pump price determination was driven by the principal of “Cost Plus,” which entailed that the final price of the petroleum products should cover all costs in the supply chain.
She said with the deterioration of the Kwacha against the dollar peaking at ZMW20/US$1, the cost of fuel would not go down even with the reduction of international prices.


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