ERB calms fears

THE Energy Regulation Board (ERB) has consoled commuters over the recent fuel price hike but insisted the increase was necessary due to depreciation of the Kwacha against the US Dollar.

Reacting to Commuter Rights Association of Zambia’s call for disbandment of ERB on grounds that it had become irrelevant, Acting Director of Public Affairs Fred Hang’andu said the upward price adjustment was necessary to guarantee security of supply of fuel.

“ERB empathizes with commuters and indeed stakeholders in other economic sectors given the expected impact of the recent increase in fuel prices. However, as stated…. the adjustment was necessary to guarantee security of supply of fuel.

“The price change was necessitated by changes in the two fundamentals that directly affect fuel prices. Specifically, those are performance of the Kwacha against the United States Dollar and changes in international oil prices. In this regard, the Kwacha depreciated to K9.75 per US$ from the August average rate of K9.02 per US$, while international crude oil prices increased to US$49.11 per barrel in September, from US$48.04 per barrel in August 2017,” Mr. Hang’andu said.

He said failure to effect the recent changes would have compromised ERB’s ability to procure adequate stocks in future.

“Alternatively, Government would have had to rescind its decision effected last year to remove subsidies, thereby putting additional pressure on the national treasury. Therefore, in line with its mandate as provided for under the Energy Regulation Act Cap 436 of the Laws of Zambia, the ERB determined the price at which the current cargo should be sold in order to recover costs that will allow for purchase of the next cargo.

“It should be noted that the ERB is not only responsible for fuel pricing. As a regulator, we have other functions which include licensing energy enterprises, ensuring provision of quality energy products and services; receiving and investigating complaints on price adjustments or the quality of service; collaboration with other Government agencies on energy matters; and advising the minister of Energy on matters affecting the energy sector.”