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Government has not collected about US$500 million from oil industry – Expert

• Government has managed to avert the worst case scenario from a pricing perspective.
• Tax waivers which have been costing government significant amounts of money are still in place.
• Members of the public are not paying for fuel at a correct price, the price they are using is highly subsidized.

Energy Forum Zambia has observed that government has not been able to collect about US$500 million from the oil industry in the past six months due to tax waivers.
Reviewing the new administration’s performance in the energy sector over the past one year, Forum Chairperson Johnstone Chikwanda noted that government has been trying to cushion citizens from the high cost of fuel through tax waivers.
Engineer Chikwanda explained to Money FM News in an interview that citizens are not paying for fuel at a correct price, as the price they are using is highly subsidized.
“The government has also managed to avert the worst case scenario from a pricing perspective in the sense that the tax waivers which have been costing government significant amounts of money are still in place, meaning that members of the public are not paying for fuel at a correct price, the price they are using is highly subsidized because more than 41 percent of taxes are not yet reintegrated there.”
“And just in the past six months, my own calculations indicate that government has not been able to collect about US$500 million from the oil industry by and large because of cushioning members of the public, so that is also something that is notable because the cushioning has been there in view of the high fuel prices globally so government has achieved on that,” Engineer Chikwanda said.
Meanwhile, Engineer Chikwanda cited completion of the 750 megawatts Kafue Gorge Lower, as another milestone which government has achieved in the energy sector over the past one year.
He said the project started under the Movement for Multi-party Democracy (MMD) government, and the previous government managed to commission one turbine, leaving out four, which the new regime has managed to finalize using internal resources.
“And we have seen that within one year the new government has managed to finalize those remaining four turbines, commission them and it has put Zambia now in a net surplus of electricity and we have started to export. This has been achieved at no further loan contraction or obligation, government has used its own internal resources so this is something that must be acknowledged and government must be commended,” he added.

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