STATEMENT FOR IMMEDIATE RELEASE
15/03/2022
BY SABOI IMBOELA
NDC PARTY PRESIDENT
The UPND should abandon the mechanism of adjusting fuel prices every month and revert to three months to six months price reviews as was the case in the Patriotic Front Administration.
They should further operationalize Indeni and modernize it to protect our economy and businesses from disruptions in the supply chain that may result from wars and natural disasters.
Subsidies should also be re-introduced to protect our economy from crude oil Price volatility.
Adjusting fuel pump prices every month is a sign of an unstable economy. It entails that you have compromised fuel reserves and an unstable procurement process. In a time of domestic crisis or international crisis (Ukraine-Russia War) you need to show that your economy is resilient to external shock or at least for a long time while the crisis persists.
Fuel prices should have at least three to six months stability or more to mitigate vulnerability and volatile prices. This is critical to avoid price instability, uncontrolled inflation and avoid businesses going under because of price fluctuations.
This is were Indeni and fuel subsidies comes in. Indeni would otherwise stabilize supply of petroleum products and not just petrol or diesel or kerosene but others as well in the event that the supply chain is disrupted. In the advent that the war spills off to the Persian Golf were majority of our petroleum products come from, it would spell immediate catastrophic shock in our economy. Reintroduction of subsidies for purposes of stabilizing prices for three to six months would insulate our economy from price volatility.
The current pricing mechanism does not give confidence to the businesses and investor community and is adversely affecting Small & Medium Enterprises (SMEs). Government should operationalize Indeni and modernize it, and reintroduce subsidies only for purposes of protecting our economy and businesses from disruptions in the supply chain and Price fluctuations, respectively.
End/NDC/2022