Energy Forum Zambia Chairperson Engineer Johnstone Chikwanda has backed the UPND Alliance led government’s decision to increase the fuel pump prices by 20 percent on petrol and 30 percent on diesel effected today.
Engineer Chikwanda has told the MDC Media Team that the extent of the fuel subsidies had become unsustainable and a major threat the national budget performance.
Engineer Chikwanda who is a renowned energy expert said the removal of fuel subsidies is in line with government portion as outlined in His Excellency, President Hakainde Hichilema’s speech when he opened Parliament on Friday, 10th September, 2021.
He said going forward, the Energy Regulation Board should resist the temptation of sliding the country back into subsidies because they only cause a lot of challenges.
Engineer Chikwanda said public sentiments when abolishing the subsidies as seen by the New Dawn Government’s bold step to bite the bullet are usually hostile.
However, the expert explained that while the adjustments in fuel prices appear to be steep, they do not represent full removal of fuel subsidies.
He said the country is coming from an immediate past where over 41% taxes got waived in order to sustain price stability in an artificial position and the oil industry had become weak to the extent that Government had to start compensating some oil companies to keep on importing fuel into the country.
“If these taxes are added back, the pump prices are supposed to be far higher than even the new prices. Thus, the new prices announced represent the commencement of a journey aimed at achieving cost reflective tariffs in the oil industry. To this end, I wish to commend the ERB for phasing the adjustment. It is a bitter pill but a necessary pill especially that it is not a full pill.” he said.
