The Energy Regulation Board (ERB) has increased fuel prices by more than 5%. According to ERB, the prices were revised following the depreciation of the Kwacha and the increase in the price of crude oil. The board says since October 2017 it had not revised the fuel prices despite the increase in crude oil prices.
In a press statement released to Manic, ERB Chairman Raymond Mpundu said the two main reasons leading to the price changes are the increase in international oil prices and the depreciation of the kwacha against major trading currencies such as the United States Dollar.
“Specifically, from the last price adjustment on 17th October 2017, Murban crude oil prices per barrel increased by 9.04% from US $58.10/bbl to US $ 63.35/bbl in November 2017; reaching US $64.85/bbl by December 2017. Further, since the last price adjustment in October 2017, the Kwacha has depreciated against the United States Dollar by about 2.15% from an average rate of K9.76/US $ down to December 2017/January 2018 level of between K9.97/US $ and K10.03/US $,” Mr. Mpundu said .
He noted that of the two fundamentals, the international oil price has been the most volatile and is the key driver for this price adjustment. Notably, prices have remained stable since October 2017.
“Therefore, it has been five months since the ERB last adjusted the pump prices. It should be noted that in order to ensure cost recovery following the removal of subsidies on fuel prices, and the policy of periodic reviews of fuel prices, the Board has determined that prices be revised as follows,” Mr. Mpundu added..
The Board chairman has explained that the adjustment in prices is based on the current cargo of finished petroleum products and petroleum feedstock.
“The price adjustment of less than K1.00 per litre for all the petroleum products except Kerosene is inevitable in order to maintain the security of supply. The ERB will endeavor to work jointly with other stakeholders to explore avenues for maintain price stability and possibly lower prices while maintaining price recovery,” He said.
The changes in prices were effective at midnight, 13th February, 2018.
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