By Isaac Zulu
The OPEC declaration of the reduction in oil output will not have any adverse effects on Zambia’s fuel supply and pricing, says Energy Regulation Board chairperson Reynolds Bowa.
In an interview, Bowa said that the OPEC decision to cut on oil output and the likelihood of having a shortage in fuel supply in the country and increased fuel pump prices have already been incorporated by the Energy Regulation Board in monthly fuel pump price reviews.
He said that while it is a fact that there is going to be low production of oil and supply, which will subsequently lead to high demand for the commodity, the anticipated increase in fuel pump prices have “somewhat been offset.”
“They made that declaration a few weeks ago. From basic economics, when production goes down, you expect a decrease in supply. And supply goes down, you expect high demand, which will ultimately lead to the increase in fuel pump prices,” Bowa explained. “But that declaration has already been incorporated in our fuel pump prices and the anticipated increase in fuel pump prices have somewhat been offset. And that is why you have noticed that the fuel pump prices have remained stable.”
He said that OPEC were not the only oil suppliers and that is why the Energy Regulation Board resorted to other suppliers to in order to avert the anticipated reduced oil supply and increased fuel pump prices.
“The OPEC are are an important supplier. But they are not the only suppliers… there are others in the oil supply chain. And so in order to avert the anticipated reduction in oil supply and increase in fuel pump prices, we had to look to other sources,” said Bowa.
OPEC recently agreed to cut oil production by 1.66 million barrels per day from May 2023 until the end of the year.
