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Increase in fuel prices has far reaching consequences on economic sectors – Expert

• This monthly review of prices of petroleum products is counterproductive.
• The economy is already in troubled waters.
• Government must realize that fuel is a major component in terms of accelerating economic development.

An Energy Expert says the continued increase in prices of petroleum products has a negative impact on many economic sectors.
Speaking in an interview with Money FM News, Yotam Mtayachalo reiterated that the monthly review of fuel prices is counterproductive because it makes it difficult for business to plan effectively.
Mr. Mtayachalo noted that the economy is still on its recovery path, hence the need for government that fuel is a major component in accelerating economic development.
He recalled that President Hakainde Hichilema promised to reduce the price of petroleum products to K12 per liter while he was still in opposition but that prices have continued to escalate, which is contrary to his promises.
“According to him, fuel was going to cost K12 per liter, now why is he not using those economic policies which he was propagating when he was in the opposition because he took over when the price of fuel was below K20, I think it was around K16 under the previous government.”
“Reviving this economy with high cost of fuel and also the pending increase in electricity tariffs will have a last nail on the costing our economy, so really it’s a very sad development,” Mr. Mtayachalo said.
Meanwhile, Mr. Mtayachalo reaffirmed calls for government to reintroduce fuel subsidies because there is no country that does not have energy subsidies.
“We have advised this government that there is no country on earth which has no subsidies, this is why we have been talking about fuel subsidies. Can this government point at which country in the world has no fuel subsidies because even countries which export oil, have fuel subsidies.”
“America is seen to be a capitalist state but it spends more than US$6 trillion annually on energy subsidies, Saudi Arabia spends US$ 45 billion on fuel subsidies and it is one of the leading exporting countries in terms of Crude Oil, Angola our neighbour spends about US$3.5 billion on fuel subsidies. These countries have maintained fuel subsidies because they understand the importance of petroleum products, because if petroleum products are very high, it means that the economy is impacted negatively,” he stated.
He added that the mining industry which consumes a lot of fuel, is the backbone of the country’s economy, hence if the mines will be spending huge amounts of money every month to meet petroleum products bills, then their profit is diminishing from the mining industry.
“That has a direct effect on the national treasury,” Mr. Mtayachalo added.
On 31st October 2022, Energy Regulation Board (ERB) increased prices of petroleum products for November 2022, by K1.57 Ngwee for Petrol, K1.22 Ngwee for Diesel and K3.17 Ngwee per litre for Kerosene.
Petrol is now costing K24.31 per litre from K22.74, low Sulphur Diesel is now at K27.38 from K26.16, while Kerosene has been increased to K19.23 from K16.06 and Jet A-1 fuel has been increased to K21.78 from K20.69, respectively.

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