THE Energy Regulation Board (ERB) has said it was supposed to increase the petroleum products prices by 32 per cent but the Government put a 17 per cent subsidy to cushion the impact of the inevitable increase.
Defending the new fuel prices, ERB acting executive director Joshua Malupenga said in a statement in Lusaka yesterday that if the Government had not effected a 17 per cent subsidy, the increment could have been by 32 per cent and not 15 per cent announced on January 12, 2010.
“In view of the foregoing, it is evident that a one-off increase would have averaged about 32 per cent as apposed to the Government subsidised increase of 15 per cent as announced by the ERB on January 12 ,2010.
“Therefore, even with a 15 per cent increase, fuel prices continue to be heavily subsidised by the Government,” Mr Malupenga said.
He said in light of the global economy slowly moving out of the recession and the demand for petroleum products beginning to increase, the international prices of oil had begun to surge upwards.
Mr Malupenga said factors that led to the pump price increase were that before the January 12 price increase the last price review was on December 22, 2008 when pump prices were revised downwards by an average 24 per cent because of the decline in international oil prices.
The price of crude oil doubled from US$40 per barrel in 2009 to the current price of about US$82 per barrel.
Consequently, the cost of a 90,000-tonne cargo had increased from $40 million in February and March last year to $70 million in December.
The cargo cost had gone up by 72 per cent while the average international oil prices had gone up by an average of 110 per cent over the period between February 2009 and January 2010.
While the exchange rate appreciated by about 18 percent the adverse impact of the 110 per cent increase in the international oil prices and the 72 per cent increase in the cargo cost nullified the benefits of the exchange rate appreciation.
He said while the price increase had an effect on the cost of most socio-economic activities, it should be observed that disregarding the economic trends would have threatened the sustainable supply of petroleum products in the country in the near future.
[Times of Zambia]
Are trying to cheat People. You are Off the Mark
We still want to know why fuel in Zambia is the most expensive in the region. Why is zambia the most expensive place to fly to in Africa ?. Don’t try and hoodwink us with percenteges of world fuel prices. the other countries in the region also buy from the same sourses.
What is he talking about? He is even boasting that he wanted to increase by 32%…….this is a joke of the year. So you guys at the ERB dont think about the implications of fuel increases? You cant also think of ways to make the price fuel cheap? Then what is your job at the ERB? IS IT TO JUST INCREASE FUEL PRICE WHEN THERE IS AN INCREASE IN WORL PRICE OF FUEL? If this is the case then ERB should be disbanded for it is a money waster period.
#3 Kambolongolo.. My sentiments exactly. WHAT NERVE!!! How can he even say we were supposed to increase like he is cleaning?? We need to restore parity with average regional prices, because the regiona has similar cost structure to Zambia. We want parity! Thats what they dont understand. We not dumb. They need to remove from pum price the 40%-50% that constitutes ADDITIONAL TAXES..
Honesty is a good virtue. I implore ERB to just tell the nation why that ridiculous increase. There is a hidden tax element in there which they think we Zambians are not aware of. What is so special about this country that our fuel should be more expesive than others? Come out in the open and explain.
Why are they trying to patronise us?Zimbabwe in still in problems economically but the cost of fuel is cheaper than in Zambia.Can’t these guys import the crude oil from Angola or Libya and cut down on costs?
Zambia awe! Where do you want us to go now? this is chasing us from our own country! Dont complain when dont come back! You dont deserve us
LOL, fellow Zambians, ask those in the diaspora what is happening with fuel prices. Here in teh UK, fuel prices have gone up and continue to do so on a daily basis. Cause? Crude oil prices have shot up on the world market as the recession ends and economies begin to grow again. ERB is right.
Secondly, fuel is expensive in Zambia because of Indeni configuration. Indeni refines an expensive crude oil mixture as it is spiked with pure petrol and diesel to make it suitable. Unless Indeni is reconfigured, fuel will always be expensive in Zambia. Indeni was designed for the 1970s fuel market. the market has changed.
Those GRZ fuel subsidies are taking money from other developmental projects. We are eating our own investment money or capital. Is this wise?
# 8 contd.
It may be wiser for the Govt to allow the full 32% fuel price increase and save the subsidy money in some bank account till it becomes big enough to buy a new hydrocarbon cracker for Indeni. Around year 2000, the Cracker cost about $100m.
The hydrocarbon cracker will enable Indeni to break down the heavier fuel oils into lighter ones such as petrol and diesel. There will be less need of comingling crude oil with pure petrol and diesel as is the case currently. In this way, feedstock into indeni will be cheaper, resulting in cheaper refined petrol and diesel at filling stations.
The subsidies are not the long term solution to high fuel prices in Zambia. We must invest in Indeni, or build a new cost effective and more effecient refinery. Address the real issue.
Fuel price upped add this to the Emmission Fee, is it worth having a car which has no roads to drive on? Well come to Zambia