• Cost plus model works more effective on Spot pricing but not on a national perspective.
• It was good to try the cost plus model regardless of it not being effective to run with.
• It responds to changes on the international market directly a situation that distorts budgeting and planning.
Oil Marketing Companies Association of Zambia has urged Energy Regulation Board (ERB) and Ministry of Energy to revert to Quarterly review of fuel pricing as opposed to a cost plus Model.
Association President Dr. Kafula Mubanga told Money FM News in an exclusive interview that the cost plus model works more effective on Spot pricing but not on a national perspective as it responds to changes on the international market directly a situation that distorts budgeting and planning.
Dr. Mubanga however noted it was good to try the cost plus model regardless of it not being effective to run with from precedent as recently observed.
“So we do think that it will be important that ERB and the Ministry of Energy revert to a quarterly review of pricing as opposed to the Cost plus Model,” he stated.
