The Ministry of Energy has disclosed that they are in talks with financing and insurance institutions on how the exchange rate for the dollar and oil prices can be hedged.
Energy Minister Matthew Nkhuwa has told Money FM news in an interview that the duration for the hedge will depend on the charges and what the ministry will be able to afford
This is expected to ensure that fuel Prices are protected and do not fluctuate according to the international prices but remain stable for the period that the country will afford to hedge for.
The Minister has explained that hedging is not different from investing in oil futures and is also similar to buying insurance as it ensures that the country is covered if there is a fluctuation of a commodity price for a certain period.
A Lusaka Based Business and Financial Analyst recommended month that Zambia Should buy oil futures or Auctions for the next three years so the country can know the fuel prices before they can be adjusted.
Mynyumba Mutwale of Vennex Capital noted that this would provide the country with Proper policy guidance avoiding economic shocks and the oil prices could be more manageable.

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