THE fuel pump prices remained constant this year for the government to cushion consumers against price shocks and not because it was an election year, the Energy Regulation Board (ERB) has said.
Finance Minister, Situmbeko Musokotwane announced that the previous Government deliberately froze the increment of the pump price because it was an election year despite fundamentals demanding a hike.
But ERB, acting Director for Consumer and Public Affairs, Nasima Shaikh said in answer to a press query that the fuel price remained constant this year to cushion consumers against the shocks from the continued adverse movements.
Ms. Shaikh said the adverse movements that progressed from 2020 to 2021 in the key pricing fundamentals which are international oil prices and the exchange rate led to the price remaining constant to ease the price shocks on consumers.
She said the fuel price remained constant despite an upward adjustment in the wholesale price affected due to the removal of Value Added Tax (VAT) and a reduction in Excise Duty following the issuance of Statutory Instruments (SIs) No. 125 of 2020 and No. 5 of 2021, respectively.
“The last fuel price review was carried out on January 15, 2021, in which the wholesale prices of Petrol, Diesel and Low Sulphur Gasoil (LSG) were increased. However, despite this upward adjustment in wholesale prices which was effected, the fuel pump prices remained unchanged,” she said.
She explained that the ERB determines petroleum prices using the principle of full cost recovery in line with its legal mandate.
Ms. Shaikh added that the pricing methodology seeks to recover all costs incurred by players in the supply chain including the government as the procuring agent from the point of importation to the point of delivery to the end consumer.
“The ERB did play its role of price determination as it has always done, however, it must also be emphasised that price determination is not independent of policy considerations such as those impacting Excise Duty and VAT in 2021 as these are cost elements also in the price build-up,” she said.
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