The Petroleum Transporters Association of Zambia (PTAZ) says consumers should expect an increase in fuel prices following government’s decision to reintroduce Value Added Tax (VAT) on fuel.
In 2021, a Statutory Instrument (SI) zero-rating Value Added Tax on imported petrol and diesel was issued. However, government has noted that it will reintroduce VAT on fuel next month as it is one of the conditions that come with the International Monetary Fund (IMF) bailout package.
Association General Secretary Benson Tembo said this will force transporters to increase the cost of transporting the product because the association needs to have a good mark up in order to be able to benefit from the transportation business.
Speaking in an interview with the Zambian Business Times-ZBT, Tembo said the cost of the commodity will go up because for transporters to smoothly move the product from one point to the other, they will increase the cost of transportation which means the company hiring the transporters will also increase the price of the commodity and the end consumer will bear the cost.
Tembo explained that this will force transporters to increase the cost of transporting the product because the association needs to have a good mark up in order to be able to benefit from the business.
“We are not doing this business for charity, we are doing this business to make a profit so anything that triggers the upward adjustment of costings will result in transporters requesting for an increase in the transportation charges”, he said.
He noted that government wants to completely remove the subsidies on fuel and reintroduce Value Added Tax which means the landing cost of the product will go up and this will trigger an increase in the cost of the product so even transporters will have to adjust upwards the transport rates.
Tembo added that this will affect the transporters negatively because any upward adjustment of petroleum products will affect the transportation of fuel.
