Procure fuel in bulk for hoarding - Kalumba
GOVERNMENT should take advantage of the slumped crude price on the international market and sign agreement with oil companies to procure fuel in bulk at current prices for future stocks, former Finance Minister Katele Kalumba has said.
US crude plunged its lowest, at an 18-year low of US$20.09 a barrel Monday as the coronavirus pandemic continues to deal a devastating blow to energy demand.
GOVERNMENT should take advantage of the slumped crude price on the international market and sign agreement with oil companies to procure fuel in bulk at current prices for future stocks, former Finance Minister Katele Kalumba has said.
US crude plunged to its lowest, at an 18-year low of US$20.09 a barrel on Monday as the coronavirus pandemic continues to deal a devastating blow to energy demand.
Dr Kalumba said Government should take advantage of the low prices and buy fuel for hoarding.
“It is a common practice in the procurement of essential commodities where we pay for current price for future stock.”
Dr Kalumba said the Bank of Zambia and the Ministry of Finance should quickly secure liquidity to purchase fuel in bulk.
He said it was a rare opportunity for prices of fuel to dropin this manner and were likely to increase once the pandemic was contained.
“The prices of fuel have reduced because of reduced movements, planes are not flying as they usually do but the prices will increase once the situation changes therefore it is important for government to swiftly move in and procure cheap fuel,” Dr Kalumba said.
Dr Kalumba said this was the time for Zambia to buy fuel as much as possible to help caution the negative impact caused by COVID-19.
“This is critical for the country because we do not produce fuel locally, the economy has suffered setbacks but if we can at least procure cheap fuel for future use the better for the country,” he said.
At session lows, oil touched $19.27 a barrel -- the weakest intraday price since February 2002.
Brent crude, the world’s benchmark, tumbled as much as 13% and fell to as low as $21.65 a barrel, its lowest point in 18 years. Brent settled at $22.76 a barrel, the lowest close since November 2002.