UPND’s Economic Reforms Set Zambia on Path to Lower Fuel Prices

Zambia is on course for a major reduction in fuel prices, thanks to the economic reforms and transparent bidding processes introduced by the United Party for National Development (UPND) government. While fuel prices have not yet dropped, recent developments in fuel procurement indicate that significant reductions are expected in the coming months.

For years, Zambia’s fuel pricing system was riddled with inefficiencies. Under previous administrations, the government relied on subsidies to artificially lower fuel prices, while the actual costs remained hidden. This approach was not sustainable, as it placed a heavy burden on the national budget. Recognizing this challenge, the UPND government took a bold step by removing fuel subsidies to establish the real cost of fuel and allow the market to dictate fair prices.

In addition to removing subsidies, the government revamped the TAZAMA pipeline, transitioning it from transporting crude oil to refined low-sulphur diesel. This shift has helped reduce transport costs and improve efficiency in the fuel supply chain. However, one of the most impactful changes has been the introduction of open bidding and competition among Oil Marketing Companies (OMCs).

Previously, fuel procurement was dominated by a few suppliers, limiting competition and keeping prices high. The UPND government opened access to the TAZAMA pipeline, allowing multiple suppliers to compete. This move has forced companies to bid competitively, ensuring that fuel is procured at the lowest possible cost.

Recent bidding results for the May 2025 fuel contracts confirm that these reforms are working. Agro Fuel Investments Limited, which had previously quoted fuel at $113 per metric ton, lowered its bid to $54.12 per metric ton in order to remain competitive. Due to Energy Regulation Board (ERB) rules, all other suppliers must now match this lower price, meaning Zambia is set for one of the most significant fuel price reductions in years.

While fuel prices have not yet dropped, these developments signal a clear shift in the country’s fuel pricing structure. The UPND’s approach of market-driven pricing, infrastructure investment, and open competition is creating a sustainable solution that will benefit both businesses and consumers. Instead of relying on subsidies that drain government resources, the new system ensures that fuel prices decrease naturally through fair competition.

As Zambia heads toward May 2025, all eyes will be on the implementation of these lower fuel costs. What is clear, however, is that the UPND’s policies are paving the way for a more stable, transparent, and affordable fuel market, a development that will have a lasting positive impact on the economy.

By Adrian Gunduzani