UPND deputy secretary general Gertrude Imenda says government cannot start telling everybody to reduce commodity prices just because there has been a downward adjustment in fuel pump prices.
On Saturday, the Energy Regulation Board (ERB) reduced fuel pump prices by K2.35 per litre for petrol, K0.58 per litre for diesel and K0.56 per litre for kerosene.
But in an interview, Imenda said there would be a time lag before the market started reacting to the reduction in the fuel prices.
“Those adjustments may not be as significant as consumers or the opposition political parties would like [them] to be. We cannot go and start telling everybody that we have reduced the fuel price so can you reduce the cost of mealie meal or reduce the cost of cooking oil or other things. The market has to respond first. Between the time a decision is taken and the time that the market starts reacting to that, there is a time lag. Even these prices of commodities that have gone up, it was not immediately the price of fuel went up but it took a little bit of time. The transporters also would want to say they want to increase bus fares. So in the process while all those things are taking place, you find that the commodity prices go up. So the market cannot respond immediately and you cannot ask the government because we are not in a commanding economy where you just direct sellers of mealie meal to reduce prices,” said Imenda.
“You cannot just ask Shoprite, Pick n Pay or Choppies and so on to reduce the price of cooking oil and other commodities. We cannot do that. The market itself will react. Before the market reacts, there is a time lag after the decision to adjust the fuel prices. It will only trickle down much later and so on. Yes, this is a marginal reduction but there is also a marginal reduction in the price of oil on the world market including the exchange rate. So all this has only translated in the marginal reduction in fuel prices. The government cannot dictate. There will be a time lag before the market starts reacting to the reduction.”
