BEWARE OF SPECULATORS

WITHOUT doubt, the current rate of the Kwacha compared with other major currencies has brought all sorts of speculations in relation to the Zambian economy. But Zambians should be wary that while taking note of the performance of the Kwacha, they should be mindful about the prophets of doom. These are the so-called specialists who are busy speculating about what could, or should happen as to the cost of living. We believe their motive is not to build, but rather to create and erode confidence not only among the ordinary people but foreign investors too. It is against this background that the Energy Regulation Board (ERB) has reacted swiftly to claims that the price of fuel is likely to go up because of the exchange rate of the Kwacha.

A South African Think Tank, NKC African Economics has predicted that the current poor performance of the Kwacha would bring about a sharp increment in fuel prices. And from the explanations of the ERB Public Relations Manager, Ms Kwali Mfuni, their predictions are not based from an informed position as to what determines a price hike on fuel in Zambia. Yes, the Zambian Kwacha might be in a weakened position now, but that does not mean an immediate price hike is coming. According to Ms Mfuni, 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. The CPM was anchored on the principle that the final price of petroleum products should cover all costs in the supply chain. This means that at the moment fuel prices would remain stable as the status of the currency would not trigger any effect, the ERB explained. As Ms Mfuni explained, 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.

“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 public ought to be wary that doomsayers merely want to dampen their mood that an impending fuel price hike is on the horizon. The catchword here is that these speculations over a fuel price hike have a hidden motive – most likely to crease social upheaval in the country.

A lot of these so-called Think-tanks work in collusion with local agents – disgruntled politicians – to peddle lies. They want to give a sense of “respectability” to what is neither here nor there. The bottom line though is that these foreign entities like their partners in crime in Zambia want to exploit any opportunity to sow seeds of discord among the people. Our appeal to the Zambians though is that they should only listen and pay attention to information from established institutions like the ERB in relation to energy issues. We do not think that Government has ever used underhand methods when assessing the price of fuel hence the need for people not to panic until there is an official announcement.