Fuel, electricity prices hike should be gradual -Kafwaya

A FINANCIAL analyst in Solwezi Dawson Kafwaya has observed that the recent increase in fuel price should have been done gradually.

Mr Kafwaya explained that this is order to cushion the negative impact on consumers whose income is minimal.

He said government should review its decision to increase fuel prices following the scrapping of the fuel subsidy as the upward adjustment will push the cost of doing business up due to increased transportation costs.

He acknowledged the fact that government spends a lot of money on subsidising fuel but that the increase should have been done gradually.

He said it does not make sense to remove the subsidy when the same government abolished the fuel levy.

“What government was supposed to do was to reintroduce fuel levy and reduce the subsidy gradually so that the heavy price burden on consumers is not suddenly felt,” Mr Kafwaya explained.

He said the notion that the increase in fuel prices would only affect the rich and not the poor is baseless because all goods consumed by both the poor and rich must be transported from their production sites to the shops.

He said the rural areas also heavily rely on fuel to run their hammer mills and generators.

“And what is also apparently shocking with this development is that the increase has not been accompanied with a grace period to allow local manufacturers, producers and consumers to adjust to the new prices,” he said.

He also proposed that the proposed increase of power by the power utility company should deferred as this will be a major blow to citizens and businesses.