EXCHANGE RATE TO DETERMINE FUEL PRICE
THE fuel pump price will be determined by the exchange rate, Zambia Energy Forum chairperson Johnstone Chikwanda has said.
Mr Chikwanda said there was a possibility of fuel pump price reduction but the exchange rate would be the major factor.
He said in an interview yesterday, the sharp price reduction of crude oil on the international market would surely benefit importing countries like Zambia.
“The crude oil price has reduced very sharply on the international market and we have never had this kind of sharp decline since 1991. What this means is that there is a possibility that while this can hurt the oil exporting countries, the oil importing countries can benefit from this particular fall.
It’s actually a blessing from heaven because this has come under circumstances which we were not expecting. And we need to find a way of getting into this opportunity and pass over the benefits to the consumers.
“But to realise this there is one fundamental factor which has to be taken into consideration, number one the state of the Zambian Kwacha because it has been depreciating for some time and I am still wondering how the government is still managing to sustain the same pump price because looking at the way the Kwacha has fallen, we would have expected an increase in the pump price,” Mr Chikwanda said. Mr Chikwanda said depending on the extent of the Kwacha deterioration, and extent to which the price of crude oil had fallen, the dominant factor of the two would have a bearing on the pump price.
He said, “it appears there is a possibility that reduction of the crude oil can be passed on to the consumers.
Meanwhile Mr Chikwanda has advised Government to consider engaging in future contracts with the suppliers.
He said that in this contract the government would agree with suppliers to fix the price of the commodity which would be sold in foreseeable future.