Zambia Hikes Fuel Prices As Austerity Kicks In
Zambia increased fuel prices last Friday resulting in fuel supply disruptions in the southern African country.
The landlocked country has started introducing austerity measures under a $1.4 billion International Monetary Fund (IMF) supported economic reform programme.
The fuel price hike is expected to push up the price of foodstuffs in the margin of up to 15% as manufacturers pass on the development to consumers.
Zambia has already defaulted on Eurobonds and is seeking debt restructuring and has been told by the IMF to drop subsidies and cut public expenditures.
President Hakainde Hichilema, who to power after defeating former leader Edgar Lungu early this year, is introducing austerity measures to rescue an economy under the burden of indebtedness.
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Chairman of the Zambian Energy Regulatory Board, Reynold Bowa, warned Oil Marketing Companies against hoarding fuels. He said:
The Energy Regulatory Board will start reviewing petroleum prices every 30 days.
The fuel wholesale and pump prices have been revised upwards for petroleum products … [and] this being an upward price adjustment, we wish to warn Oil Marketing Companies that it is against license conditions to hoard fuel.
However, on Friday, some filling stations had run out of the commodity ahead of the festive season.
Vice president Mutale Nalumango explained that the fuel price increase was aimed at stabilising the Zambian economy.
She said excessing borrowing, which had resulted in the country defaulting, had pushed up its indebtedness, describing the situation as embarrassing.
