KCCI welcomes reduction in fuel prices with caution

KCCI welcomes reduction in fuel prices with caution
By Mutuna Chanda in Kitwe and Kelvin Tembo in Lusaka
Thursday September 25, 2008 [04:00]

KITWE Chamber of Commerce and Industry (KCCI) chairperson Eddie Kapungulya has cautiously welcomed the reduction in the prices of petrol and diesel. And Zambia Association of Motorists chairperson Chazura Zulu has said fuel prices should have been slashed further than the announced reduction. In an interview yesterday, Kapungulya said the fuel price reduction was welcome if it was a permanent move.

"If the reduction in duty on fuel is only temporary to suit certain things, then there is a problem," Kapungulya said.

He said the business community's cry had been about the high taxes slapped on commodities such as fuel.

"The reduction will allow pump prices of fuel to be determined by crude prices on the international market," Kapungulya said. "If you look at what is happening on the international market, oil prices have gone down drastically but our prices are still high because of high duty."
He said the reduction would cushion businesses from high production costs which would hopefully translate into commodity price reductions.

The Energy Regulation Board (ERB) on Tuesday announced the reduction of petrol and diesel pump prices.

ERB said the reduction was necessitated by a decline in oil prices on the international market and the government's cutting of import duty on petrol, diesel and kerosene.

Petrol was reduced by K1,956, diesel by K1,091 and kerosene was cut by K852.

Duty on petrol is now at 36 per cent from 60 per cent before June this year, diesel tax is now at seven per cent from 30 per cent in June while kerosene is now excise duty-free from 15 per cent.

Vice-President Rupiah Banda recently directed finance minister Ng'andu Magande and energy minister Kenneth Konga to work out a fuel price reduction by cutting taxes.

And Zulu said the ERB should wake up and not wait for orders from Vice-President Banda.

Zulu said fuel prices had been increased more than twice since the beginning of this year and that ERB could have reduced the commodity’s cost further than that.

“We expected them to reduce to at least K5,000 or so because the cost of fuel on the global market had reduced and such benefits should be seen to trickle down to the local people,” he said.

Zulu, however, said motorists would quickly consider writing to the Road Transport and Safety Agency (RTSA) for a proposed reduction to public transport fares, although he did not clearly state how soon the association would tender in the proposal.