Seventy Dol­lar ($70/bbl.) crude, weak Kwacha pushes Zam­bia’s Pump prices 9% higher

Zambian Business Times - - COMMODITIES - “This was seen com­ing es­pe­cially in the wake of in­ter­na­tional crude prices that have steadily been edg­ing higher and at some point were al­most touch­ing the $USD70/bbl. mark. We pro­jected the hike ear­lier but due to the lag­ging ef­fects and the stock that w

THE EN­ERGY REG­U­LA­TION BOARD – ERB in a press re­lease has an­nounced an in­crease in pump prices by an av­er­age of 9.19% ef­fec­tive mid­night 12 Fe­bru­ary. Our an­a­lysts re­ported 3 months ago that pump prices were at risk of soar­ing higher in light of bullish Brent prices on the New York Mer­can­tile Ex­change to over $USD68/bbl. then. This was in the wake of con­sen­sus among the OPEC na­tions that had fi­nally agreed to tighten sup­ply in a move that would sup­port oil prices higher to as­sist crude ex­port de­pen­dent na­tions bal­ance fis­cal bud­gets. Zam­bia be­ing a net im­porter was ex­posed to this to the ex­tent that the cost of im­por­ta­tion would swell higher. From last time the ERB in­creased prices crude price has risen over 15.3% to over $63/bbl. and the Dol­lar- Kwacha ex­change rate has weak­ened by around 4% to USD9.8/ZMW which breaches the 2.5% ad­just­ment trig­ger for ad­just­ment pur­poses. The ERB an­nounced that petrol will be priced 6.01% higher to ZMW13.75/litre, diesel 8.3% higher to ZMW12.01/litre and Ker­sone will price 13.17% higher to ZMW8.85/litre. These prices are ef­fec­tive mid­night on 12 Fe­bru­ary 2018.

Mar­ket Com­men­tary

Brent graph from trad­ing eco­nomics show­ing the Oil price tra­jec­tory.

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