APRIL FUEL PUMP PRICE REDUCTION TO SAVE CONSUMERS K320 MILLION
By Patricia Male
Energy expert Johnson Chikwanda says the April 2023 fuel pump price reduction of K2.97 Ngwee per liter for diesel and 0.93 Ngwee for petrol as announced by the Energy Regulation Board will save consumers a combined K320 million in the month of April based on projected consumption patterns.
Dr. Chikwanda who has welcomed the reduction says pressure on working capital for both fuel retailers and Oil Marketing Companies –OMCs-is also expected to ease leading to an improved return on working capital deployment for the month of April.
In an interview with Phoenix News, Dr. Chikwanda explains that this is because each time prices are adjusted upward without increasing the regulated fix margins, the industry experiences reductions in return on working capital.
He further explains that each time prices are increased without increasing the regulated fixed margins for OMCs and fuel retailers, the industry experiences a deterioration in return on deployed working capital.
Dr. Chikwanda says the reduction in wholesale and retail fuel prices will therefore give some relief on the extent of working capital deployment in the downstream segment of petroleum industry.
PHOENIX NEWS