ERB cautions against fuel speculation

THE Energy Regulation Board (ERB) has cautioned people against speculating on adjustment of fuel pump price. ERB Public Relations Manager Kwali Mfuni in a response to a press query said fuel pump price can only be adjusted after an assessment was done. Ms Mfuni said it should be noted that fuel prices were determined using the Cost Plus Model (CPM) which takes into account the time at which the cargo was procured and ultimately landed unto the Zambian market.

Ms Mfuni said the CPM was anchored on the principle that the final price of petroleum products should cover all costs in the supply chain. She assured that at the moment fuel prices would remain stable as the status of the currency would not trigger any effect . Ms Mfuni said the fuel pump price was reviewed only upon purchase of cargo by government and assessment of the invoices for a particular cargo by the ERB. She was reacting to the prediction by the South African Think Tank, NKC African Economics that the current poor performance of the Kwacha would bring about a sharp increment in fuel prices. “Our cargo usually lasts about sixty days and as such the pricing cycle tends to reflect that period. A cargo comprises petroleum feedstock and finished petroleum products and the fuel derived thereof is sold at prices that would allow for a full cost recovery,” Ms Mfuni said. “Thus, the prices for each product are only determined once full assessment of all attendant costs has been completed,” she said. The process of assessment, Ms Mfuni said, relied on information provided by government, being the importer, and takes account of other fixed costs in the supply chain.

The fuel pump price was reviewed only upon purchase of cargo by government and assessment of the invoices for a particular cargo by the ERB.

— Kwali Mfuni