By Angela Moonga
Energy expert Dr Johnstone Chikwanda has cautioned against stretching the surcharge of K3 per litre to consumers who already have bilateral agreements which have provisions for long periods before effecting price changes.
In a statement to Daily Revelation yesterday, Dr Chikwanda stated that the move could potentially harm the stable tax regime which government had implemented in the mining industry.
”This surcharge could translate to ZMK 70 million per month for some big mining companies which is ZMK 840 million per year,” Dr Chikwanda stated. “The Energy Regulation Board (ERB) has implemented a ZMK 3 per litre surcharge on fuel imported as a Stabilisation Fund into the Energy Fund. Zambia consumes approximately 260 million per month of diesel and petrol. This means that the Stabilisation Fund will be approximately ZMK 780 million per month. The is in addition to the Fuel Strategic Fund of ZMK 0.15 per litre which translates to ZMK 39 million per month. The purpose of the stabilisation fund is to anchor the policy shift from monthly fuel pump price reviews per month to 3 months fuel pump price review cycle. The target is to stabilisation the fuel pump price for at least 3 months.”
He stated that by the third month, the stabilisation fund would have accumulated to K1.56 billion.
”In the same vein, the Fuel Strategic Fund would have accumulated to ZMK 117 million in 3 months. While I welcome the policy shift, I wish to advise the policy makers to be careful with how this policy gets implemented,” Dr Chikwanda stated. “This is because some of fuel consumers such as the Mines have their own fuel pricing formular on bilateral arrangement with fuel suppliers and that their unique formula is already inbuilt with provisions which allow the parties to review the prices on at least 3 months period.”
He stated that the formula which they use was very different from the fuel pump price computation which ERB sought to stabilise.
