• Monthly fuel pricing minimizes Government’s exposure to exchange rate losses.
• All fuel products are now being imported as finished products on a continuous basis.
• The previous fuel pricing cycle was based on each 90,000 metric tonne shipment of imported crude feedstock.
Energy Regulation Board (ERB) says it has continued to engage stakeholders to ensure that pricing of fuel is responsive to the present industry needs.
Responding to Money FM’s press query, Board Manager-Public Relations Namukolo Kasumpa reiterated that ERB’s decision to shorten fuel pricing review cycle from 60 to 30 days entails that the price of petroleum products is more responsive to changes in both the exchange rate and international oil prices.
Ms. Kasumpa explained that currently, Indeni Oil Refinery which was the main supplier of fuel products to the Zambian market has been placed under care and maintenance, therefore, all fuel products are now being imported as finished products on a continuous basis.
“The previous fuel pricing cycle was based on each 90,000 metric tonne shipment of imported crude feedstock, which would take around sixty (60) days to be processed by INDENI and consumed on the Zambian market, Therefore, the pricing and procurement cycles had to be aligned.”
“Currently, INDENI which was the main supplier of fuel products to the Zambian market has been placed under care and maintenance. Therefore, all fuel products are now being imported as finished products on a continuous basis,” Ms. Kaumpa said.
She stated that the monthly fuel pricing minimizes Government’s exposure to exchange rate losses in the case of a depreciating local currency and ensures full cost recovery in the supply chain, thereby guaranteeing that sufficient revenue is collected to sustain the continued importation of fuel into the country.
Ms. Kasumpa added that any benefits that would be derived from the appreciation of the Kwacha against the United States Dollar and reduction in international oil prices during the 30-day pricing cycle would accrue to consumers in the following months’ price review.
“However, the ERB continues to engage stakeholders to ensure that pricing of fuel is responsive to the present industry needs.”
“Pursuant to the Energy Regulation Act No. 12 of 2019 of the Laws of Zambia, the ERB is mandated to determine, regulate and review charges and tariffs in the energy sector – that includes petroleum products,” she stated.
Several stakeholders especially those in the transport sector have been calling on the Energy Regulation Board (ERB) to revert to the quarterly review of fuel prices in order to have stability in commodity prices on the local market.
