Fuel price likely to increase after tax re-introduction-expert

An energy expert has predicted an increase in pump prices following the government’s decision to introduce a tax on fuel.

Chiko Mudenda explained that the next monthly pump prices review will be dependent on the government’s resolve to re-introduce taxes on imported fuel effective September 30, 2022.

Mr. Mudenda said the removal of subsidies or tax waivers on Value Added Tax (VAT), excise duty and customs (import) duty on petroleum products may trigger an upward adjustment of pump pricing.

Speaking in an interview with ZANIS, Mr. Mudenda however noted that the mysterious gas leaks discovered early this week on the pipeline between Russia and Europe has no effect on Zambia’s energy network and pricing.

He explained that while Zambia relies on the Middle East for petroleum products, including the gas for cooking, the Russian gas leak crisis may only affect the European market.

Mr. Mudenda added it would be of concern for Zambia if there was a crisis in the Middle East.

“If the position remains the same, then we would say the prices of petroleum products are likely to remain the same or reduce,” Mr. Mudenda indicated.    

Meanwhile, another energy expert, Bornface Zulu, said there is a likelihood that prices of petroleum products will increase on the international market as demand is expected to go up.

Mr. Zulu said there is therefore a possibility that pump prices will be affected by the international oil prices as long as the country imports petroleum products.

“The prices that the international oil market is going to offer will be final, so if they are hiked then the prices will be high within the chain. This means that even Zambia is affected,” Mr. Zulu explained.  

Government announced the planned re-introduction of VAT on imported petrol and diesel effective September 30, 2022.

And the Ministry of Energy, through the Energy Regulation Board, is expected to announce the monthly petroleum price review tomorrow, September 30, 2022.