Fuel prices go up, PF govt removes subsidy saying not benefiting the poor

The Zambian government has announced an increase in fuel pump prices effective midnight today, April 30, 2013. This follows the removal of the five percent fuel subsidy.

Mines, Energy and Water Development Minister Yamfwa Mukanga said the removal fuel subsidies in the prices of petroleum products is aimed at meeting the current costs of supplying and delivering of the products.

The Minister told journalists at a media briefing in Lusaka that the price of diesel has been adjusted upward with an increase of K1.63 per litre, petrol by K1.75 per litre while kerosene has been increased by KR1.68 per litre.

Mukanga explained that in order to reduce the percentage of increase in the price of fuel, the PF government has decided to remove the five percent import duty that was chargeable on crude feedstock. He said government has furthermore reduced the KR0.25 that was chargeable on petrol for the strategic reserves fund to KR0.15 on all fuel products

“In order to reduce the level of increase in fuel prices, the government has decided to remove the five per cent import duty chargeable on crude feedstock,” Mukanga said. “Furthermore, the government has reduced the KR0.24 that was chargeable on petrol for the strategic reserves fund to KR0.15 on all products.”

The Minister explained that the fuel subsidies introduced by the former regime – MMD to benefit the poor was instead only benefited a few of the intended beneficiaries. He said the evidence on the ground show that the poor has benefited less from this measure.

“Key consumers of fuel who are the mining industries and urban dwellers that are able to own vehicles have benefited most from this measure,” said the Minister.

Mukanga also said the depreciation in the exchange rate between the local currency, Kwacha, to major international currencies has had an adverse effect on domestic fuel prices.

Meanwhile the increment of fuel has not been well received saying the effect is that the cost of living will equally go up due to high transport costs.

In the run-up to 2011 tripartite elections the PF said Zambia’s fuel was one of the highest in the region and promised to bring the price down once voted in. The PF said they had a formula on how to reduce the price of fuel.