Agness Changala
The Energy Regulation Board (ERB) says expected benefits of the downward movement in International oil prices, have been negated by the depreciation of the kwacha against the United States Dollar.
And ERB has maintained fuel prices for petrol, diesel, Jet A one and Kerosene.
At the monthly review, board chairperson Reynolds Bowa said during the period under review, the prices of both crude oil and finished oil products marginally declined.
He said the decline was mainly attributed to the known adverse impact of the Middle East conflict between Hamas and Israel which had not resulted in significant supply disruptions.
“Furthermore, during October 2023, there was speculation that Russia would partially lift the voluntary export ban on petroleum products. These two factors helped to keep the global supply of oil and therefore, prices relatively stable,” he said.
Bowa said the kwacha during the review period generally depreciated against the United States Dollar by 3.84 percent from an average of 21. 11 per dollar to 21.92 per dollar.
He said the depreciation was mainly attributed to the continued demand and supply imbalance in the market.
“Notably, from the last fuel adjustment on Thursday 30th September 2023, the price of petrol, diesel and kerosene in the international market declined by 10.2 percent, 3.33 percent and 5.37 percent respectively,” he said. The price of petrol reduced from an average of USD 101.5cents to USD 90.74 cents per barrel, diesel reduced from an average of USD119.96c to 115.96 cents per barrel, kerosene reduced from an average of USD118.85 cents to 112.47 cents per barrel.as a result, the expected benefits of the downward movement in international oil price, have been negated by the depreciation of the kwacha against USD.”
He said during the review period, there were several developments that will have significant positive impact on the prices and the supply of petroleum products in Zambia.
Bowa said in September 2023, the government finalized the TAZAMA open access guidelines which will provide for the use of the pipelines by third parties.
He also said during the same month, statutory instrument number 41 of 2023 was published to support open access to the pipeline and that TAZAMA pipelines Ltd published an expression of interest for use of the pipeline for the financial year 2024.
Bowa further said for the October 2023 price review, the ERB has implemented interim cost line revisions to the transport rates for petrol and diesel, in order to mitigate the adverse movement of domestic fuel prices.
He said The ERB has introduced a temporally transport equalization mechanism that would be used to cushion the difference between the actual transportation costing incurred by oil marketing companies and the revised transport fees in ERB cost build up. The equalization mechanism is supported by strategic reserve fund.
And Bowa said the prices had been maintained because the prices on the national market and exchange rate of the kwacha against the dollar resulted in changes that were below the set threshold of 2.5 percent.
He said the price of kerosene had been maintained on account of sufficient national stock availability.
“Based on the forgoing, the recommended prices of pump fuel prices are as follows: Petrol was K29.98 and will continue to be K29.98, diesel was K29.96 and will continue to K29.98, Kerosene was K20.44 and will continue to be K20.44 and Jet A One,” said Bowa. “Posted air fuel prices at International Airports are determined as follows: International Airport Lusaka K29.29, Mfuwe International K30.50m harry Mwaanga Nkumbula International Airport K30.10, Simon Mwansa Kapwepwe International Airport it’s going for K29.29.”
Bowa said the prices were effective from midnight.
