The Energy Regulation Board has said the reduction in fuel pump prices is a result of falling oil costs on the international market and the stability of the local currency.
The ERB today announced the price reduction of between K0.86 and K1.22 per litre of petrol, diesel and low sulphur gas oil while the price of kerosene remains unchanged.
Effective last night, a litre of petrol costs K15.20 from K16.06 (K0.86 reduction), diesel will now fetch at K13.43 from K14.65 (reduction of K1.22) while that of low sulphur gas is now K15.75 from K16.94 (reduction of K1.22).
A litre of kerosene has remained at K11.34.
ERB chairperson Raymond Mpundu said in a statement that a review of the wholesale and pump prices of fuel was done for the most recently imported cargo of petroleum feedstock and finished petroleum products from which a decision was made to reduce pump prices.
“This adjustment of pump prices is consistent with Government policy to review fuel prices for every cargo, which lasts about 60 days, taking into account changes in the economic fundamentals at any one given time. This price reduction is based on a review of the following cargo: The 100,689 metric tonnes (MT) of petroleum feedstock cargo imported in January 2019 at a cost of US$69.51 million; and
- Imported finished petroleum products supplied to Government comprising, 28,221 m3 of petrol and 70,493.50 of Low Sulphur Gasoil (LSG) at a total cost of US$62.91 million,” Mpundu stated.
“This price reduction has been largely influenced by movements in international oil prices, the exchange rate between the kwacha and the United States Dollar and recent amendments to the Customs and Excise Act. Notably, after the price adjustment in October 2018, international oil prices significantly dropped while the kwacha continued to depreciate steadily to around K12/US$. The sustained depreciation of the Kwacha implies that the possible gains from reduced international oil prices have been slightly negated. Specifically, following the last fuel price adjustment on 2nd October 2018, the price of Murban crude petroleum feedstock, which Zambia imports, declined – from an average of US$82.30/bbi in October 2018 to an average of US$59.50/bbl in December, 2018. On the other hand, during the same period, the Kwacha steadily depreciated and stabilized to a monthly average rate of K12.00/US$ in the fourth quarter of 2018.”
He added that international prices of petrol declined to around $68, $69 and $67 per barrel in the Mediterranean, Arab gulf and Singapore markets respectively.
“Similarly, during the same period, international diesel prices declined to levels of around US$85/bbl, US$82/bbl and US$80/bbl, in the Mediterranean, Singapore and the Arab Gulf markets, respectively. It also noted that, the Customs and Excise (Amendment) Act No.19 of 2018 which was enacted on 26th December, 2018 by Parliament has now been effected. Consequently, Excise Duty on petrol and diesel was increased to K2.07/Iitre (from Kl.97/litre) and KO.66/litre (from KO.62/litre), respectively,” stated Mpundu.