Seventy Dollar ($70/bbl.) crude, weak Kwacha pushes Zambia’s Pump prices 9% higher
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.
Brent graph from trading economics showing the Oil price trajectory.