Maravi

Rupiah has failed to keep his promise on fuel – Milupi

Rupiah has failed to keep his promise on fuel – Milupi
By Chibaula Silwamba
Fri 22 Jan. 2010, 04:01 CAT

PRESIDENT Rupiah Banda has failed to keep his election campaign promise to continue reducing fuel prices, Luena independent member of parliament Charles Milupi has charged. In an interview, Milupi said it was unfortunate that President Banda had abandoned his promise.

“Yes! It's unfortunate because having given the promise and he actually lowered the price. What factors are causing the increase of fuel prices, hardly a year after that? I think that when you make promises you must keep those promises,” Milupi said.

“One of their slogans was keeping the promise, this is one of the promises they made, they should keep it. I would appeal to him to reconsider this fuel prices issue.”

He said the impact of the fuel price increase would be negative.

“The impact is going to be extremely negative for the simple reason that the government is targeting to lower inflation to single digit. Inflation for 2009 October up to November was averaging 13 per cent and in December they claimed that it had come down to 9.9 per cent. This increase affects all other commodities - foods, transport, anything that is produced there is requirement for fuel. Those will go up,” Milupi said.

“So immediately it is going to have negative impact on the inflation target and therefore on the cost of living in this country. And one other thing that we must remember is that these cost increases in fuel where we do not have uniform prices they affect the poorest … more than anybody else because in rural areas where we have the highest poverty levels fuel is more expensive than in urban areas.”

He said the price increase would adversely affect rural people.

“So these increases will even make higher increase on the poor people like the ones I represent in Luena and other rural areas. This government must think about these matters very seriously,” Milupi said.

“I don't think that fuel price increase is necessitated by the movement of prices of crude oil on the world market.”

He said the last time fuel prices were lowered as a result of election promise in 2008.

“President Banda promised 'that when I am voted in I will lower fuel prices' and they did lower the price by about 30 per cent. But you recall that the price of crude oil at the international market at that time was in the range of US $140 per barrel,” Milupi said.

“Right now it is half; it's about US $70 per barrel. So what has necessitated the increase? Secondly, if you compare us regionally, why does Zambia continue to have the most expensive cost of fuel? Even countries with depressed economies like Zimbabwe, fuel is cheaper there than it is in Zambia.”

He said the government must have a very transparent procurement system of crude.

“The current system where you are having all these issues of LITASCO and the other things like that... It's not transparent. It raises a lot of questions whether there is no corruption involved. Whenever you have corruption, the people that pay for that corruption are the ordinary citizens through increase in prices,” he said.

“We must review all those taxes. When President Banda promised that he is going to reduce prices. That is why not long ago airlines landing in Zambia would make sure that they have sufficient fuel so that they did not have to buy Jet A1 fuel from here. It is lowering those taxes.”

He called for the establishment of a proper oil refinery.

“The Indeni was set up many years ago. It was set to separate; it's a separator, it's not a refinery. It separates comingled products. Is it still cost effective? There must be a quick review of that,” Milupi said.

“In long term, the government must consider importing fuel from Angola which is one of the second largest producer of oil in sub Saharan Africa.”

He said an oil refinery could be set up in Western and North Western provinces that are closer to Angola. The Energy Regulation Board (ERB) this month increased fuel price by 15 per cent.

Labels: CHARLES MILUPI, FUEL, RUPIAH BANDA

posted by MrK @ 7:05 PM