By Michael Kaluba
Oil Marketing Companies Association of Zambia has warned of a potential upward adjustment of fuel pump prices should the kwacha continue to depreciate without making positive gains against the United States dollar in the next 2 months.
Association President Dr. Kafula Mubanga says the free fall of the kwacha against major convertible currencies has continued to negatively impact oil marketing companies profits.
This is despite the waiver government granted oil marketing companies enabling them to import finished petroleum products at a cheaper price over a period of six months, in addition to the zero-rating of vat on diesel and petrol, which has resulted in the stabilization of the pump price.
Dr. Mubanga says even with such government implemented measures, the continued depreciation of the kwacha and the notable increase in oil prices on the international market is translating into drastically reduced profit margins for OMCS.
The Zambia kwacha is currently trading at over k22 to a dollar while Bloomberg energy reports that Brent crude is at over us$66 per barrel.