THE decision by the UPND government to sustain the tax waiver on fuel deserves commendation. We know that government may not want to call it a subsidy, but in economic effect, that is what it is. When government waives tax which it would ordinarily collect on fuel in order to reduce or stabilise the pump price, it is subsidising the consumer indirectly. That sacrifice has an economic value, and in the current circumstances, it is timely.

When the price of fuel goes up, the whole economy feels the pain instantly. Transport fares move. Mealie meal moves. Cooking oil moves. Farm produce moves. Building materials move. School transport moves. Production costs move because fuel is involved in almost everything. This is why fuel pricing must never be treated casually.

With the prolonged instability around Iran and the Strait of Hormuz, it was going to be difficult for citizens to survive without some form of state intervention. When international prices rise, when freight premiums increase, when insurance costs go up, or when the kwacha is under pressure, the ordinary citizen pays. The person who suffers is not only the motorist. The marketeer, the commuter, the farmer, the student, the worker and the parent all suffer. It is therefore expected that a government which cares for its people must step in when the market becomes too harsh.

On this score, the UPND government has done the right thing. The reduction in fuel prices announced by the ERB may have been supported by movements in international oil prices, the easing of risk around the Strait of Hormuz and the appreciation of the kwacha, but the sustained tax waiver remains important. Without that waiver, the pump price would have been higher. That means citizens would not have fully enjoyed the relief which has now come through. This is why we commend government.

But our commendation comes with a plea: this waiver must not be removed immediately after elections. We say this because citizens are not naïve. They know that governments sometimes become generous before elections and rediscover fiscal discipline immediately after voting has ended. If this intervention is necessary in July and August, it will not automatically become unnecessary the morning after elections. The cost of living will still be high. Transporters will still be moving goods. Families will still be buying mealie meal. Businesses will still be trying to survive. Government must therefore avoid creating the impression that the tax waiver is an election-season sweetener.

Of course, we are not suggesting that tax waivers must remain forever. Government needs revenue. Roads, schools, hospitals, CDF, public workers and social services all require money. A tax waiver has a cost. But the removal of such a waiver must be gradual, transparent and linked to objective market conditions. What must not happen is an abrupt reversal after elections which leaves citizens feeling deceived.

We must also address the behaviour of businesses. It is pleasing to see retailers such as Shoprite making sure that the benefit of reduced fuel prices is passed on to consumers. That is how responsible corporate citizenship looks. When government sacrifices tax revenue to cushion the economy, businesses must not pocket the benefit. They must transmit that relief to the final consumer.

Sadly, this is where we still have a serious problem with some retailers and service providers, especially transporters. When fuel prices go up, they adjust their prices with frightening speed. A shop owner will not even wait for old stock to finish, they will immediately claim that transport costs have gone up. A supplier will do the same. But when fuel prices reduce, suddenly everyone becomes slow.

Strictly speaking, it is an act of commercial theft when government makes a deliberate consideration to reduce the fuel price for the benefit of the people, and a business refuses to pass on that benefit. Morally and economically, that business is stealing public relief. Government gives up revenue, citizens are supposed to benefit, but a middleman pockets the difference. That is wrong.

This selfishness also puts government in bad light. Many citizens do not understand the full fuel price build-up. They do not know where government’s role ends and where the private sector’s responsibility begins. So when prices of goods and services refuse to come down, they blame government. Meanwhile, government may have already done its part. This is why enforcement agencies, consumer protection bodies and sector regulators must be alert. Where there is room to demand explanation from retailers, transporters and service providers, they must do so.