Due to sensational media reports to the contrary, I wish to restate that the New Dawn Government has no plans to revert to previous ways of adjusting fuel prices after months, as that makes it hard to manage the debts owed to oil marketing companies and doesn’t make the pump price to be cost-reflective.
At no point in my recent media interviews has my office said that we are going back to the quarterly review system. As things start, we shall continue with monthly review to allow consumers to only pay for true costs.
The completion of the cleaning of the TAZAMA pipeline – and the subsequent use of it to transport diesel at a cheaper transportation cost – doesn’t automatically mean we shall revert to the quarterly review. What we are saying is that, with the use of the pipeline, bulk purchases and bulk storage can allow for quarterly reviews because then as a country we can stock fuels for about three months and this allows us to tie the pump price to true costs. Even then, it will simply be a consideration. And if the numbers are right, we can revert to quarterly review. Until then there is no plan to move from monthly reviews. Monthly reviews continue.
However, the New Dawn Government is a listening government. As a result, you will recall that last month I challenged stakeholders who had been affected by the monthly review of fuel prices to make formal complaints to government. So far, there is no evidence that the current monthly review of fuel prices being undertaken by the Energy Regulation Board (ERB) has affected the operations of any company.
The decision to continue with monthly reviews is anchored on the knowledge that reverting to quarterly reviews of fuel prices will hurt the economy even further. The reverting to the 90-days review mechanism will increase the accumulation of debt already owed to Oil Marketing Companies (OMCs). The monthly fuel pump price review mechanism may not be popular to some citizens at the moment but it will yield the intended results in the long run.
Hon. Eng. Peter Chibwe Kapala
Minister of Energy
