ERB slashes fuel prices

Wed, 04 Jan 2017 14:36:42 +0000

By AARON CHIYANZO

THE Energy Regulation Board (ERB) has reduced the wholesale and pump prices of all petroleum products with immediate effect following a reduction in international oil prices and the stabilization of the Kwacha.

ERB vice chairperson Francis Yamba said yesterday that the price of petrol, which was at K 13.70, has been reduced to K12.50 while diesel has been reduced to K10.72 from K11.40.

He also said that the price of Low Sulphur Diesel was now K13.01 from K13.69 and that kerosene had been reduced to K6.81 from K8.03.

Prof Yamba explained that the price of petroleum products had been reduced because of the recent reduction in international oil prices from US$49 per barrel to US$45 per barrel and the stabilization of the Kwacha.

He said that the price reviews were determined by analyzing the costs incurred after every consignment of petroleum products imported.

Prof Yamba also said that Government imported and refined crude oil almost every six weeks on average.

“Based on the previous analysis in September last year, ERB has revised pump prices for petroleum products by reducing petrol by K1.20, diesel by 68 ngwee, kerosene by K1.22 and Low Sulphur diesel by 68 ngwee. The new pump price is effective midnight on Tuesday, 3rd January 2017,” he said.

Prof Yamba said that the pricing of petroleum products sold in the country was mainly affected by movements in oil prices on the international market and the rate of the Kwacha against the United States dollar.

He disclosed that fuel prices were only revised when the computed wholesale price adjustment exceeded the 2.5 percent threshold.

Meanwhile, Prof Yamba said that that exchange rate at the time of importation was K9.98 per US dollar compared to the K10.70 per dollar in June when the last revision was made.

He explained that the exchange rate appreciated while the international price of oil fell slightly at the time of importation for the current price review to be effected.

“Thus, the unit cost of the imported finished petroleum products in the current importation is significantly lower than that of the previous consignment,” he said.

Prof Yamba said that during the period January to June last year, the international oil prices generally increased but that they started to fall by the end of July.

He said that there was a sharp increase again in October due to the proposals by the Organization of  Petroleum Exporting Countries (OPEC) to allocate production to its members which pushed pump prices upwards.