Maravi

Govt strategises on rising fuel costs

Govt strategises on rising fuel costs
By Joan Chirwa and Chiwoyu Sinyangwe
Friday June 27, 2008 [04:00]

THE government is devising strategies on how to mitigate the impact of rising costs of fuel on local consumers, acting Secretary to the Treasury Dr James Mulungushi has said. Dr Mulungushi could however not clearly state whether the government would bow to calls for a review of the fuel tax structure.

“Government will explore every option available to mitigate the impact of rising oil prices on the international market,” he said.

Dr Mulungushi said he was not in a position to say which option would be taken.

Energy permanent secretary Peter Mumba recently said suggestions would be made to the finance ministry for a review of the fuel tax structure.

A barrel of crude oil a week ago hit an all-time high of US $140, with analysts predicting a further rise of up to US $200 per barrel sometime next month.

And British Airways (BA) is implementing ways of making the airline efficient in view of the rising fuel prices.

BA commercial manager for East and Central Africa, Suneel Tyagi said BA was working at increasing the frequency of flights into Lusaka.
“One of the things we are putting into place is to change operation procedures to try to conserve fuel by buying new aircrafts because they are more fuel efficient and retire some of the older airplanes,” he said.

He however, ruled out holding fuel as a way of overcoming the cost, stressing that the airline would consider hedging in fuel purchasing.
“In terms of our operations cost, fuel is a very serious problem. This year alone we expect fuel to be our biggest single cost and it will be more than our staff costs for the first ever. To mitigate this effect, we hedge in our fuel purchase…so we buy some of our fuel in advance,” said Tiyagi.

Labels: FUEL, INFLATION

posted by MrK @ 8:52 AM