Government must work hard to resolve the inefficiencies in the fuel procurement system, says Economics Association of Zambia (EAZ) president Isaac Ngoma
Commenting on the recent hikes in fuel prices, Mr Ngoma observed that it was important that the country became more long term focused in instituting some risk mitigation measures to cushion against such economic shocks.
The Energy Regulation Board (ERB) increased pump prices of fuel by an average of 8.3 percent effective April 18.
“Government must work hard to resolve the inefficiencies in the fuel procurement system. It is important that we become more long term focused in instituting some risk mitigation measures to cushion against such economic shocks,” Mr. Ngoma said.
He said the ordinary people will feel the greater pinch as prices of goods and services would go up.
“The ordinary people will definitely feel the pinch as goods and services will become costly which may undermine poverty reduction efforts,” Mr. Ngoma said.
He advised the government to find alternative fuel sources as the country dealt with the current challenges.
“Alternative fuel sources must also be looked as we deal with our current challenges,” Mr Ngoma said.
And Mr. Ngoma said the current fuel prices increases were inevitable going by the increase in oil prices on the international market due to external factors, such as the crisis in Russia and Ukraine while domestically, the Kwacha has depreciated significantly against the US Dollars,” Mr. Ngoma said.
He said the current situation was unfortunate as the nation was seeing inflation rising since the start of the year.
“This recent fuel pump price increase will have far reaching effects since fuel is a major factor in production and distribution of goods and provision of certain services. The compound effect will be a general rise in the prices of goods and services,” said Mr. Ngoma. “Ultimately we shall expect a rise in inflation which may make it difficult for government to contain as they strive to meet the set year end inflation target.” He said