EXTENTION OF FUEL SUBSIDIES ON PETROLEUM PRODUCTS BY 3 MONTHS WILL NOT IMPACT ONGOING IMF TALKS
By Chileshe Mwango & Micheal Kaluba
Economist Chibamba Kanyama says government’s decision to extend and maintain fuel subsidies on petroleum products which were supposed to come to an end on June 30, for three months, up to September 30 will not have an impact on the ongoing international monetary fund -IMF- discussions.
Last week, Energy Minister Pater Kapala disclosed that value added tax-vat- and import duty will remain zero rated on diesel and petrol, while excise duty is waved on diesel and reduced on petrol, a decision some stakeholders say will jeopardize the ongoing talks as it is against the IMF conditions.
But in an interview with Phoenix News, Mr. Kanyama has dispelled these fears saying the fiscal decisions that government is currently making are communicated to the IMF and other critical creditors.
Mr. Kanyama says government is making consultations and cannot be careless to make such decisions hence the need for the public not to worry.
Meanwhile, the Oil Marketing Companies-OMCs say government’s extension of tax waivers on the importation of petroleum products for the next 3 months has averted a possible fuel shortage in the country.
The OMCs are of the view that while the extension of waivers sees government foregoing revenue collection that could have been channeled to critical sectors of the economy, it is to the benefit of both the end users and the Oil Marketing Companies and will result in consistent and secure supply of the commodity, private investments and a thriving sector for at least three months.
OMCs President Kafula Mubanga tells Phoenix News that oil marketing companies would have faced a lot of difficulties in the fuel supply chain if government had not extended the tax waiver on the importation of petroleum products as they would have not managed to import petroleum products due to the existing minimal profit margins which he said were not attractive enough for sector players to import the products.