Revision of Petroleum Pump Prices for January 2024
During the period under review, the prices of oil on the international market generally declined. The decline was mainly caused by weak global oil demand arising from continued uncertainty about the extent and duration of the oil supply cuts by the Organisation for the Petroleum Exporting Countries (OPEC+).
Further, uncertainty arose from Angola’s decision to leave the OPEC creating positive supply expectations into the global market which would increase the supply position amid a weak global demand.
Notably, from the last fuel price review on 30 November 2023, the price of Petrol, Diesel and Kerosene on the international market declined by 5.44%, 7.5 1% and 4.36% respectively.
Specifically, petrol fell from US$89. 18/bbl to US$84.33/bbl while diesel fell from USŞI04.65/bbl to US$96.79/bbl. Kerosene fell from US$I04.05/bbl to US$99.51/bbl.
The benefit of the decline in international oil prices was, however, negated by the depreciation of the Kwacha, during the price review period. The average exchange rate depreciated by 7.69%.
The depreciation was mainly attributed to continued foreign exchange demand pressure from various market sectors in excess of supply.
During the fourth quarter of 2023, to mitigate the possible adverse impact on domestic prices, the ERB implemented a mechanism to support and moderate the transport costs incurred on petroleum products that are imported by road.
For the January 2024 pricing, the transport equalization mechanism will be implemented in line with the January 2024 guidelines. The transport equalization mechanism utilizes funds from the Strategic Reserve Fund.
The Energy Regulation Board (ERB) has therefore maintained the pump prices of Petrol, Diesel, Jet A I and Kerosene for January 2024.
The prices have been maintained because the changes in the two key fundamentals that determine domestic prices of fuel, that is, international oil prices and exchange rate of the Kwacha against the United States Dollar, resulted in changes in the domestic fuel prices that were below the set threshold of 2.5 percent. Meanwhile, the price of Kerosene has been maintained on account of sufficient national stocks.
Based on the foregoing, the recommended pump prices for January 2024 are as follows:
1.Following the coming in of the New Government in 2021, there were several policy changes within the petroleum sub-sector.
Key among the policy reforms was the disengagement by Government from procuring national petroleum requirements and allowing the private sector to talke up this role.
This development in the market necessitated an amendment to the pricing framework which required constant engagement with stakeholders and the public at large at the point of price reviews through press briefings.
The monthly press briefings which have been done in the past two years were necessary to engage the public and various. stakeholders on the movements in commodity and other pricing parameters that were impacting domestic fuel prices.
lt is therefore our considered view that the publíc and the stàkeholders are now fully aware of the developments and determinants of the domestic fuel prices. In this regard, the ERB will no longer carry out press briefings for each monthly fuel price review.
These will now be issued through a press release that will be sent out through various media houses as well as official communication platforms to notify the public and stakeholders of the changes in the domestic fuel prices.
However, our normal engagements with stake-holders will continue issued on Sunday 3rd December 2023.
Always punishing the voter for his incompetence.
Does he really have a degree in economics? He should get a refund from UNZA as it seems they taught him animal husbandry, not economics.
Scared of the backlash if they had increased during new year. They will catch up with a big increment for February.