Consumer Unit Trust Society (CUTS) international has warned the Zambian government against effecting price controls as it introduces the uniform pump prices of fuel on the market.
CUTS centre coordinator Patrick Chengo said that if government allows its own price controls to flood the market, it is clear that the UPP will only cause more harm than good.
“This is because price controls will limit the benefit of the consumer and affect the competitiveness the sector,” Mr Chengo said
Mr. chengo said that there is need for government to realize that both the consumer and those competing for the same market benefit from its decision to unify the pump prices.
He said it is possible that if government’s decision affects the competitiveness in the fuel market, the demand might go high but the supply will drop owing to the fact that companies will decide to pull out.
[pullquote]”This is because price controls will limit the benefit of the consumer and affect the competitiveness the sector,” Mr Chengo said[/pullquote]
Mr chengo also noted that currently, the urban consumer has been forced to subsidize the rural consumers because government did not implement its mechanism properly.
He has,therefore, called for a further reduction of the prices to ensure that the benefits are felt by everyone across the country.
Mr Chengo noted that with the threats that the price controls under the uniform pump price poses on the competition, there is need to drop the prices further down.
[ QFM ]
It is this price control that led to shortages in KK’s time. RB should have learn from these shortages and made a better decision but it appears he is keen to take us a lot of years back. Distributors will definitely shun rural areas
Hmmmm! fyampita! Sounds like Italian to mine ears!
He said it is possible that if government’s decision affects the competitiveness in the fuel market, the demand might go high but the supply will drop owing to the fact that companies will decide to pull out.
I like this line of thought. You see MMD is trying to please the rural population in view of the 2011 elections.
Awe naine fyena ifi fyampita. Nalimo I should rewrite my TOEFL? Ba Chengo imwe mwilaleta icisungu cakosa pano pa LT,mwaumfwa?Twalimishiba mwafyalilwe palya pa mushi pa Mumbolo mu mfumu ba Chabilikila so muli ba bululu ba wesu imwe.Landeni mu cibemba pakuti tumfwikishe efyo mulesosa.Elyo neyo yine company mubombako ati CUTS, nifinshi mucita CUT kanshi? Ine nafilwa ukucumfwikisha pantu apa kamfulumende alefwaya acite CUT prices ya fuel kulya ku mushi mwafuma but imwe mwebene ba CUTS ati ‘awe, mwicita CUT ama prices!’. Eko twafilubila.
“He said it is possible that if government’s decision affects the competitiveness in the fuel market, the demand might go high but the supply will drop owing to the fact that companies will decide to pull out.”
This statement is misleading. They’ll make profits in Lusaka and CB to cater for their losses in the rural areas (were demand is not as high as Lusaka and CB). That is the whole essence of cross subsidization in this case.
Ok, so my comments are blocked now? Awe cilifye ba LT.
If companies pull out of fuel supply it means very soon Zambia will experience fuel shortages.
This is the work for V.J. Oppositon parties work up bcoz this is RBs campaign strategy to lure people in the rural areas so as to capture votes. 2011 is just by the corner, wapya munzi
I don’t quit agree with you Sir! Suppliers will make a profit whether they are selling their products in Zambezi or in Ndolas Ndeke township. What it implies is that the Oil Marketing Companies will now desire to open up selling points in places where they have no presence so as to increase their sales volumes. It will in fact enhance competition. Those that travel to these areas will no longer have to carry drums of fuel in their vehicles. The OMCs will always have a market for their products.