Explain oil hike

Zambian people are owed an explanation for the present petroleum product price increase.
In particular the government must explain why Zambia must have the most expensive products in the region when we source the product from the same suppliers.  The only difference is in the agents who transport oil, in our case this contract was awarded to transfigura.
A few months ago the Minister of Justice and Patriotic Front Secretary General winter Kabimba ascribed Zambia’s high fuel prices to corruption.  He said at the time the country had lost more than K2 trillion to corruption and that this was the reason why petroleum products were so expensive.
We assume that the corrupt element in oil procurement has been removed.  If so why hasn’t the price come down?  Why should it instead go up?  Is the corrupt element now demanding more from the Zambian people and if so why is the government acquiescing?
There is no doubt that a large proportion of the pump price arises from taxes that are paid to the government by the consumer that is why it is disingenuous to suggest that consumers are being subsidized. A   lesson    can be learnt from our neighbouring countries that have introduced a very transparent procurement system which is controlled by market prices.
South Africa for example bases its pump prices on the movement of worldwide stocks at the point of purchase.  There is no reason why we in Zambia cannot do the same.
It is true that our refining capacity is tied to comingled stock which is occasionally supported by imported stocks of finished products, yet still there is no justification for a taxation regime that makes the products so expensive to the extent that some airlines would rather refuel in neighbouring countries because Zambia is too expensive.
As it stands any adjustment to oil prices impacts directly on the vulnerable Zambians who neither have the means nor resources to cushion themselves against resultant adjustments in good and services.  Already transporters have decided to increase bus fares which means that the ordinary worker will now have less money in their pockets contrary to the pre-election promise of more money in people’s pockets.
Food prices will also follow suit soon because farmers have to transport their products to markets.
Generally therefore an inflationary trend will result and those who suffer most will be the vulnerable who have no steady income to rely on.  This is unfair and unjustified.
The government must therefore take immediate action to correct the situation, because it is untenable that a government founded on the promise of creating conditions of social justice should instead prey on the weak in society who have no access to resources.

Categorized | Editorial

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