An energy expert says fuel prices in the country are expected to be adjusted upwards following the projected increase of oil prices on the international market.
Speaking in an interview with Money FM News, Johnson Chikwanda said this is because Zambia’s pump prices are influenced by two factors that include the price of fuel on the international market and the exchange rate.
Mr Chikwanda explained that if any of the factors is more dominant than the other it can have either a positive or negative effect on the country’s pump price resulting in either an increase or reduction in the commodity.
“Some year’s back Zambia abolished subsidies on petroleum products, meaning that the Country has to move with the trajectory of how fuel prices on the international market and the rate at which the exchange rate is devaluing,” Mr Chikwanda noted.
He said appreciation and stabilization of the Kwacha against major convertibles is the only valuable that can stop the hike in petroleum products in the country.
“Otherwise as things stand at the moment it will be very difficult to avoid the fuel pump price increase, because of the anticipated increase of the commodity on the international market and also the depreciation of the Kwacha against the US Dollar,” Mr Chikwanda said.
Oil prices are projected to increase on the international market due to hopes that the Covid-19 vaccine will boost fuel demand.