Economist projects hike in June fuel prices

 

 

  • Oil prices have continued being range-bound regardless of the fall witnessed on 21st May, 2024.
  • The prices are still high and this may result in increase in fuel prices.
  • If the prices will be maintained, that will be purely for political appeasement.

 

An Economist says fuel prices for June 2024 are likely to increase owing to high oil prices on the global market and weakening of the Kwacha against major convertible currencies.

Speaking in an interview with Money FM News, Chomba Chomba noted that Oil prices on the international market have continued being range-bound regardless of the fall that was witnessed on 21st May, 2024, hence this may trigger an increase in domestic fuel prices.

Mr. Chomba however said  if the Energy Regulation Board (ERB) will maintain the prices, it will be purely for political appeasement so as not to harm the consumers, who are already financially stressed.

“Oil prices have continued being range-bound regardless of the fall that we witnessed on 21st May, 2024.”

“I still belive that the prices are still high from my lenses and in respect to depreciation of the Kwacha against other convertible currencies, I am projecing an increase in fuel pump prices for the month of June,” Mr. Chomba stated.

He added that ERB would also want to maintain the prices in view of the increase in May inflation rate to 14.7 percent from 13.8 percent.

“However, if the prices will be maintained, that will be purely for political appeasement and political appeasement is where you make decisions where you fill will not harm the consumers, or that will stress them more financially.”

“And again why they would want to maintain the prices is because they have seen that inflation for the month of May has increased and they wouldn’t want to see that June comes with such similar results,” he added.

On the other hand, Oil Marketing Companies Association of Zambia (OMCAZ) expects a K3 reduction for both petrol and diesel prices for June 2024.

Association President Dr. Kafula Mubanga told Money FM News that this is due to the positive performance of the Kwacha this month compared to April 2024, coupled with stable fuel prices on the international market.

“The anticipated downward adjustment in fuel prices will also be triggered by government’s consideration of the losses and challenges faced by the citizens due to the hike of fuel pump prices last month,” Dr. Mubanga stated.

During the previous fuel price review, Energy regulation Board (ERB) increased the price of petrol by K4, diesel by 0.8 Ngwee, kerosene by K7. 95 and Jet A-1 by K3. 30 for the month of May, 2024.

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