The Zambia Congress of Trade Unions (ZCTU) says government’s decision to effect a five per cent hike in fuel prices will have a knock-on effect on the general prices of commodities and escalate the cost of living.

On Monday, Energy Regulation Board (ERB) chairperson Raymond Mpundu announced an upward adjustment of a litre of diesel from K13.43 to K14.23, while a litre of petrol was adjusted to K15.98 from K15.20, representing an increase of 43 ngwee for diesel and 78 ngwee for petrol.

But reacting to this development in a statement, ZCTU director of public relations Martin Chembe regretted that the rise in fuel pump prices would escalate the cost of living.

“It is regrettable and saddening that the current increase in fuel pump prices will also raise the cost of doing business, and that cost will be passed on to the final consumer. This will, generally, raise the cost of goods and services and further deteriorate the real incomes for the workers, who already have challenges meeting their daily household needs. The increase will also lead to loss of jobs, especially for the Small and Medium Enterprises (SMEs), which may react by reducing their workforce in order to remain afloat. We want to appeal to government to avoid taking the people for granted and impose any increase or levy in order to mitigate the impact of a depleted Treasury. It is immoral to increase the suffering of the poor by making it even more difficult for them to access basic needs. We also want to appeal to government to have a heart for the poor because the increase in fuel prices will push the rate of inflation up and with the impending increase in electricity tariffs, life will become unbearable for the people,” Chembe stated.

And Chembe expressed concern that government had still failed to cut off unnecessary middlemen in the procurement, a factor that had kept fuel prices high.

“For a long time, government has failed to put in place measures to stabilize oil prices and ensure that the price of oil is kept at basic minimum level. We note that the main reason advanced for the current increase is the depreciation of the Zambian kwacha against the US dollar. However, we know that apart from the exchange rate volatility, the procurement process is the main contributing factor to the high pump prices because there are too many middlemen in the procurement of fuel which tends to raise the pump prices. Apart from this, pump prices have continued to rise because there are a range of taxes and levies imposed at every stage of the procurement chain. Therefore, there is need to cut the procurement process in the fuel sector to allow for direct procurement of fuel,” stated Chembe.