By CHUSA SICHONE –
THE Energy Regulation Board (ERB) has adjusted fuel retail pump prices upwards by K1 effective midnight with a warning to penalise the Oil Marketing Companies (OMCs) breach their licence conditions by suspending business until the new prices kicked in.
The fuel hike has been necessitated by the increase in the international oil prices and the depreciation of the Kwacha against the United States dollar (USD).
“Based on the foregoing, it is with deep regret that the ERB has adjusted fuel retail pump prices upwards,” ERB vice-Board chairperson Ngande Mwanajiti said at a media briefing in Lusaka yesterday.
Petrol has been increased from K11.67 to K12.97, diesel will now be sold at K11.09 from K9.87, and the new kerosene price is K7.82 from K6.50 while low sulphur gas (LSG) is now pegged at K13.38 from K12.16.
Mr Mwanajiti said the fuel prices in Zambia were determined by international oil prices and the exchange rate of the Zambian Kwacha against the US dollar.
Mr Mwanajiti said international oil prices increased owing to expected growth in world consumption, particularly in the third quarter of 2017, due to generally favourable economic conditions across the world.
During the same period, the Kwacha depreciated by 5.04 per cent against the dollar from K8.92 in July to K9.37 in September in 2017, and that since the last price adjustment on August 7, 2017, the Kwacha had depreciated against the US dollar by about 8.1 per cent from August.
The recent increase in international oil prices and the depreciation of the Kwacha, the unit price for petroleum feedstock and finished products, for the current fuel importation under review, was relatively higher than the most recent past importation on which the August price reduction was based.
Mr Mwanajiti said the current price review was based on the 102,129.435 tonnes of petroleum feedstock cargo imported in September this year and imported finished products to be consumed along with the products from the feedstock.
The other imported finished products to be consumed along with the products from the feedstock are 43,219.32 cubic metres (m3) of petrol and 87,581.62m3 of LSG.
Mr Mwanajiti said ERB inspectors would be on the ground to ensure that OMCs did not breach their licence conditions by refusing to sell the petroleum products until midnight.
He also said that the ERB would continue to monitor developments in the exchange rates and international oil prices and would only adjust fuel prices approximately every 60 days, if changes in wholesale prices increased or reduced by more than 2.5 per cent.
The ERB announced the reduction in the fuel retail and wholesale prices on August 7 this year.