The Consumer Unity and Trust Society – CUTS has expressed concern with the negative impacts that this fuel price hikes will have on consumers, particularly low-income consumers, calling on the government to think innovatively and explore other options available.
CUTS Centre Coordinator Chenai Mukumba has explained in a statement made available to ZBT by CUTS Communications Officer Njavwa Simukoko stated that the majority of consumers in Zambia will be negatively affected by the rise in fuel pump prices through pass on effects like resulted higher bus or taxi fares, hence it can be expected that public transport providers will soon increase their prices as they shift the burden of the higher pump prices to consumers.
The CUTs coordinator said to cushion the effects of increased costs emanating from the fuel price hike on the poor, there is need to allocate more resources towards well-targeted social safety nets that have high coverage of poor households and little leakage to non-poor households particularly the current Social Cash Transfer Schemes and Food Security Packs.
“Consumers are already feeling the brunt of the country’s economic situation and this price hike will indeed only worsen the current situation. With inflation at 9.3%, the price of goods and services are increasing at a rate that is increasingly becoming untenable for consumers.
Combined with the expected price of electricity tariffs this will likely only increase the country’s inflation rate,” She said.
She has since noted the need by Government to improve on initiative studies that determine the efficiency and cost effectiveness of fuel procurement in Zambia compared to other countries in the region like Malawi, Zimbabwe and Botswana to see how it can reduce the costs associated with procuring fuel and ensure a lower pump price.
An energy expert Johnston Chikwanda has described the current revision in fuel prices by the Energy Regulatory Board – ERB a reasonable and foreseen move as it is in line with the removal of subsidies government policy on energy products.
In a statement released on 23 September 2019 by the Energy Regulation Board – ERB has indicated that it has revised the price of fuel upwards stating that it is it policy direction to migrate to cost reflection pricing of energy products and services.
Chikwanda has told the Zambian Business Times – ZBT in an exclusive interview that with the current hike in crude oil prices on the global market, it is only reasonable that fuel prices needed to be adjusted as seen from the current economic challenges.
He has added other factors include the underperformance of the Zambian currency against the dollar and other currencies which has in the recent past affected business on the market, inflation and high cost of living by many Zambians.
“In a Scenario where we do not have subsidies, this can happen and there are limited alternatives to be put in place, yes the state of the economy is bad but if government cannot find short term solutions to the challenges then the only way is to revise prices,” he said.
Chikwanda has since encouraged consumers not to exasperate but adjust to the situation as the country tries to put in place long term measures adding that there is also need to cut down on unnecessary movement which may not be legitimate reasons.
