By SHERRY CHABALA
THE Oil Marketing Companies Association of Zambia (OMCAZ) has urged Government to put in place measures to cushion the pump price of fuel from the fluctuating exchange rate.
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OMCAZ president, Kafula Mubanga said the reduction and long-term stability of the petrol pump prices was dependent on Government implementing measures to regulate the fluctuating exchange rate as well as addressing the high cost of transporting the product by road.
Dr. Mubanga proposed that Zambia should rebuild the railway line and connect it to already existing infrastructure in Tanzania to reduce road transport costs, which will enable the flow of cheaper petroleum products onto the local market.
Meanwhile, Dr. Mubanga commended the government for its bold decision to remove fuel subsidies and converting the TAZAMA pipeline to convey processed low sulphur diesel, which he described as a beneficial policy, which will result in a restructured energy sector and less state indebtedness.
He also urged Government to focus on finding solutions to stabilise the exchange rate for the benefit of the business sector.
“It is very important to understand that the prices of fuel are triggered by the international prices which border on the exchange rate. So, if your exchange rate is competitive it means that at that point you will be buying petroleum products at a cheaper price because the exchange has some gains.
Now if the currency is not performing too well prices becomes a little bit expensive,” Dr. Mubanga said.
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