*PF REGIME SHOULD INTERVENE ON THE ERRATIC SUPPLY OF FUEL*
UPND has observed with great concern the erratic supply of fuel in the Country as it may lead to complete fuel shortage if corrective measures are not taken quickly.
Part of the reason for this situation is because the Country is bankrupt, has no foreign reserves, and we are owing international oil suppliers huge sums of money in US dollars. We understand that’s the reason the PF regime allowed the Oil Marketing Companies (OMC’s) to import petroleum products at zero VAT rating.
However, our investigation indicate that the OMC’s are not importing enough volumes because they are landing the product at a loss of about +K2.00 a liter on both diesel and petrol despite the zero rating of VAT. The reasons for this loss are as follows:-
1. Oil prices on the international market have been rising,
2. The Kwacha has continued to weaken against the US dollar,
3. The Government zero rated VAT but increased the Strategic Reserve Fund fee from K150/m3 to K1,090/m3 which has wiped out the supposed gains made by zero rating VAT.
4. Scarcity of foreign currency, especially the US dollar on the market, hence OMC’s are struggling to access sufficient foreign currency to pay the International fuel suppliers.
We therefore propose the following:
1. Suspend the Strategic Reserve Fund (SRF) fee to provide a real cushion for the OMCs and not the cosmetic measure of zero rating VAT and increase SRF fees. This measure will provide real savings that OMC’s can pass on to the consumer.
2. Improve availability of US dollars to OMC’s by channeling all foreign exchange to essential goods and not luxuries.
3. Temporarily reduce/abolish marking fee currently standing at K199.99/m3
If these measures are not taken, the PF will have no option but adjust the pump price upwards. This is the worst that could happen to a population that is already stressed with high cost of living due to poor economic management by the same Governnment.
*UPND Chairperson for Energy*