With the new Energy Regulation Board – ERB leadership opting to adopt a monthly fuel price review model, indications are that fuel pump prices across Zambia are expected to go up beginning March 2022.
International crude oil prices have climbed up to an all time high of $105 a barrel for the first time since 2014 after failure of diplomatic efforts between Russia and Ukraine failed resulting into military conflict. This has resulted into crude oil prices and the resulting pump prices for consumers going up globally.
Analysts have predicted that the prices will rise much higher amid fears of major disruption to the global energy supply chain. Russia is one of the world’s largest producers of oil and natural gas and disruptions in its output whether as an unintended consequence of military action or as a response to international sanctions is expected to have a telling effect on energy prices.
Energy Expert Boniface Zulu has advised consumers to brace themselves for an increase in fuel prices as world oil prices continue to go up due to the ongoing conflict between Russia and Ukraine. This conflict is also resulting in price speculation for crude oil.
Speaking in an exclusive interview with the Zambian Business Times-ZBT, Zulu said world oil prices are expected to skyrocket in the next coming weeks to the highest since the cold war because such disturbance has never been experienced since the cold war.
He explained that Zambia’s fuel prices would be adversely affected because it has been buying fuel from the Middle East and sometimes from Ukraine and the current destabilization that Ukraine is undergoing will have negative effects on its oil production, adding that Ukraine plays a big role in oil production.
Zulu advised that government should consider re-introducing fuel subsidies in order to cushion consumers from the expected high fuel prices hikes, adding that this also calls for Zambia to reduce its over-dependence on imported oil as the main fuel it uses for transportation.
“We need to consider electrical mobility; it has to be the secondary source of fuel that will enable people to move goods. We produce copper and it is the main material used to produce electric vehicles and electric trains, we should consider to start planning, designing and building these systems utilizing our copper as a country”, he said.
He told ZBT that there is no certainty concerning the extent of the expected fuel pump prices arising from the new world oil prices during this period. Moreover, the Kwacha has not been stable, which is the other lever that could help avert another fuel price hike.
The global economy has been battered by the Covid pandemic and just when it seemed that the world was adjusting to living with the pandemic, the Russia-Ukraine conflict has come in to pose yet another global challenge. Zambia needs to work out it’s own path on how to navigate these global challenges.
