OIL Marketing Companies Association of Zambia (OMCAZ) president Dr Kafula Mubanga says his association anticipates that the fuel pump price will be increased to K30 during this month’s price review.

Meanwhile, Bus and Taxi Owners Association of Zambia (BTOAZ) spokesperson Amis Daudi says the frequent fuel price adjustments have disastrous effects on the transport sector.

In an interview, Wednesday, Dr Mubanga said the association did not anticipate a reduction in pump prices due to the continued slight increase in the prices of crude oil on the international market.

“I think by now we are standing around 26 to 27 [kwacha] somewhere about there. We expect that it would shoot to close to 29 and 30 somewhere about that projection. So we anticipate that change and that movement in the pricing. I think that having had prices of fuel of course not coming down on the international market, still escalating, we do not anticipate a down drop in terms of the pump prices. Definitely, we anticipate a slight increase because I think there has not been so much increase on the international market,” he said.

“I think that there has been a bit of stability and so we hope that the increase will not be extortionate, it will not be beyond 1 percent because what we will be able to see is that the changes are coming from the removal of these waivers that were there on the product. And we expect that impact to trigger an increase. Of course, putting in mind that there has been a slight consistent change on the international market so we expect that those two factors will trigger a slight increase but not beyond 1 percent. We hope that it will fall within 1 to 2 percent. I think that will be acceptable changes.”

Dr Mubanga however hoped that the increment would be within manageable levels.

“So we hope that [it] will not be very drastic, in terms of shoot up. It should be within the manageable levels but this will continue to affect us owing to the very fact that you have this war between Russia and Ukraine still continuing. It means that there is a ripple effect on the production of crude on the international market vis-à-vis sanctions against Russia on the refineries and that will continue to escalate,” said Dr Mubanga.

“We also commend government obviously with the attempt to come up with the resolve regarding the Angola deal on how best it would work with it. And so we are hoping that that will turn out to be a lasting solution to some of these issues. And also the pipeline issue, we hope that government is expediting these processes to mitigate the impact of these pump price changes.”

Meanwhile, BTOAZ spokesperson Amis Daudi hoped for fuel price stabilisation, saying the frequent increases in the cost of goods and services would affect economic growth.

“We have seen an appreciation of the exchange rate which has kicked in and our hope is that the escalation in the cost of importation of fuel should be positively impacted by the strengthening of the kwacha against the dollar. So our hope is that there shall be no adjustment in the price of fuel so that we can introduce in the economy some form of stability. You require stability on the planning horizon of any business. You should know how your cost will be looking like tomorrow for you to budget or plan your business activities effectively. So our hope is that there should be some stability,” he said.

“The process of price stabilisation should kick in and you know that’s what we are looking for as businesses. Frequent adjustment of the cost of transport is not in our best interest. You know as an economy, there is a limit beyond which you cannot increase prices. There is a limit because at some point it will be difficult for people to find resources to pay for the goods and services in the economy. Frequent increase in the cost of goods and services in the nation will affect economic growth in the long run.”

Daudi added that frequent upward adjustment of fuel pump prices would result in the collapse of the transport sector.

“We are affected by the high frequency of fuel price adjustment. It is our biggest fear that the upward adjustment will result in disastrous effects, particularly on the transport sector and that is for a simple reason. The transport sector in this country is carried by scale operators. If you do a survey today, you will find that the operators of buses and taxis are people who have retired from meaningful employment and they are on a subsistent level where one operator will have one vessel, this one will have two taxis, one taxi. Any serious distortion or upheaval in the economic fundamentals has got a daring effect on business survival prospects,” he said.

“The result will be that operator one will park his vehicle, operator two will park his taxi, operator three will park and cumulatively over a period of time you will find that people have parked their vehicles, taxis and as a result there will be no vehicles operating in the bus stations. That will mean the transport sector will be in a condition of collapse and that is our biggest, biggest fear. It is one of our biggest fear because if that happens, a lot of people will lose.”

Daudi said poverty levels would be high provided fuel pump prices keep on increasing.

“Those operators have got families, they have got employees, they have got dependents and if they go out of business, it means all those people will lose their livelihood. What begins to kick in is the chaos in the national economy; poverty levels will go up and all sorts of vices will come up. Economic prosperity comes when people are in gainful employment and they are able to take care of their daily needs, being able to buy goods and services provided on the market,” said Daudi.