Amidst the Covid-19 pandemic that has hit Zambia hard economically, it is necessary for all possible gains to be transferred to the people to help cushion the dire economic effects of the novel Covid-19. Fuel is one such critical commodity that directly affects the cost of business and has a significant bearing on the local economy. There has been an unprecedented slump of oil on the international market, including “Murban Crude” the blend of crude that is imported by Zambia.
On 23 April 2020, ERB through the Public Relations Manager Ms. Kwali Mfuni issued a statement titled “Fuel Pump Prices in the Light of Current International Oil Trends and Kwacha Performance”. In the statement the ERB has claimed that the current gains from the sustained reduction in international oil prices have been negated by the depreciation of of Kwacha in the same period and therefore resulting into no price change since December 2019. This leaves much to be desired as a simple calculation will show you that the Kwacha amount of a Barrel of Crude is significantly cheaper today than it was in January regardless of Kwacha depreciation.
The general populace must be concerned and join in questioning the ERB Board why they have not taken critical consideration of the prevailing situation, Zambians are currently in distress and deserve a break especially that it is justified as follows; In Q1 Jan 2020 a Barrel of Murban Crude was selling at Us$69 with the Kwacha exchange rate at ZMW14.40/Us$, meaning a barrel of Murban was fetching ZMW993.6, the price of Murban Crude on 23 April 2020 was selling below Us$20 (Us$19.01 to be precise with a days delay from a Record low Us$15.44 the previous day), the Kwacha exchange rate is about ZMW18.70/Us$ using Us$20/bbl, a barrel of Murban Crude is fetching around ZMW374 currently. There is a massive difference between ZMW993.6 and ZMW374, ZMW619.6, which should amount to a significant downward Fuel adjustment of some sort, as the difference cannot only buy an extra barrel but there will be a whole lot of change. It is very unfortunate that instead of painting a real picture, the ERB has opted to vaguely elude the Zambian people to justify non adjustment of fuel.
I call upon Mr Raymond Mpundu to urgently sit with his ERB board and critically consider the disparity the major factors that determine fuel prices have brought or perhaps give a more elaborate and convincing outlay of the “Cost Plus Model” and perhaps call for its review. Covid-19 is everyone’s struggle may we all play our part in easing the fight and a fuel downward adjustment will guarantee public benefit. Let us rise to the occasion together we can defeat Covid-19.
Daniel Sichilongo
Secretary General
Green Party of Zambia
That is a very good and valid point. Even with the depreciation of the kwacha the current price of fuel is still not justified as per the calculations above. Fuel prices need to come down, period.
They can’t reduce because they’re the suppliers themselves.
And they allow a mere PR manager to issue the statement. The board has always issued such statements. The people of Zambia have been calling for a reduction in fuel prices in light of the almost free oil on the international market. The statement from the Green Party is spot on they have at a basic level explained why and how the fuel prices should be reduced. The board is ducking from this request but are always quick to justify the increase. Right now there is a justification and not that depreciation of the Kwacha nonsense!!!
The trouble is real, at a time when the population would have done with lower prices, even by the party promises of lower prices slogan, to cushion the impact of Covid 19. Still our technocrats find it within themselves to invent new economics of things. Could it be that they think the population is too uneducated to understand simple maths/
ERB has lost direction. The main role of a Regulator is to ensure fairness in the Business environment. But here in Zambia their main role is to dictate prices! To make matters worse their decisions are not final; they are frequently overruled by
ERB FAT CATS ARE ONLY THERE TO PROTECT THEIR EXTRAVAGANT SALARIES AND ALLOWANCES: TO HELL WITH THE GENERAL POPULACE.
THE SAME CAN BE SAID OF BANK OF ZAMBIA AND SOME MINISTRY OF FINANCE OFFICIALS.
BOTH CATEGORIES OF OFFICIALS HAVE LET DOWN ZAMBIANS IN A SCANGALALOUS WAY.
THEY SHOULD ALL BE FIRED!!!
After reading that statement from ERB, i have just added them to the list of institutions i feel should be closed. On the same list is NPSA & Workers’ Compensation. information that cannot be used is useless
Mwelwa, I agree with you, almost all regulatory bodies in Zambia are parasites, slimy worms. Zambia is better off with self-regulatuon and free market competition. Anybody with approval from standards board shall be able to join the supply chain to bring prices down. Airtime is another example of exploitation. It is 1000 more expensive than India, China, Malaysia, Indonesia. Petroleum price in international markets are as on date at 1/3rd of the time it were pegged in Zambia.