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HIKE FUEL PRICE, GOVT URGED – TO NORMALISE FUEL SUPPLY

By ADRIAN MWANZA

GO V E R N M E N T should increase the fuel pump prices because the landed prices of fuel has become more than the selling price, says an energy expert, Mr Johnstone Chikwanda. Mr Chikwanda said the fuel shortage situation could only be normalised if the government increased prices so that the private sector could start getting a reasonable margin on returns.

He said the question was not whether Oil Marketing Companies were hoarding fuel or not, but that they were making significant losses as the landed cost of fuel has become more than the selling price. He said even the ministers of Finance and Energy had informed parliament that on Government fuel imports, it was subsiding about $21 million per month which was K360 million every month.

Mr Chikwanda said this move was not sustainable for the government and that meant that OMCs which were importing for themselves were also suffering huge losses. He said if the situation was not corrected urgently it would create significant imperfections in the local market.

 “The crude oil prices have skyrocketed to $83 per barrel, and several countries in the region have adjusted fuel pump prices but there has never been a fuel pump price adjustment in Zambia for two years,” Mr Chikwanda said. He said several taxes had already been waived on fuel and there was little room for the government to navigate and avoid a fuel pump price increase.

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