Petroleum Pump Prices Revised Amid Global Oil Price Surge and Exchange Rate Depreciation
The Energy Regulation Board (ERB) has announced an upward adjustment in the pump prices of Petrol, Diesel, Kerosene, and Jet A-1 in Zambia. The new prices, effective from midnight today, reflect the recent movements in international oil prices and the depreciation of the Kwacha against the United States Dollar.
The main drivers behind the revisions in petroleum prices are the significant changes in the global oil market. Between the July 2023 and August 2023 price review, the average prices of Petrol, Diesel, and Kerosene rose by 3.50%, 7.57%, and 6.97% respectively. For the August 2023 price review, Petrol increased from US$83.66/bbl to US$86.59/bbl, Diesel from US$86.91/bbl to US$93.49/bbl, and Kerosene from US$86.09/bbl to US$92.09/bbl.
The surge in international oil prices is attributed to speculations of potential global supply deficits. Following the announcement by the Organization of the Petroleum Exporting Countries and its allies (OPEC+), there will be oil production cuts soon. This decision coincides with a steady increase in global demand due to the ongoing economic recovery after the COVID-19 pandemic. The rising trend in global oil prices aligns with increasing prices of major commodities, influenced by the prospect of interest rate hikes in major global economies.
Additionally, the exchange rate of the Kwacha to the US Dollar depreciated during the August 2023 review period, from K17.73/US$ to K18.51/US$, representing a 4.35% decrease. The depreciation is mainly driven by the demand for foreign exchange surpassing its supply. Despite the positive outlook from the conclusion of the debt restructuring program, the Kwacha’s response has been slow, as it continues to face persistent inflationary pressures.
The simultaneous increase in oil prices and depreciation of the Kwacha has led to the upward adjustment of domestic fuel prices. The ERB has made changes to the national uniform pump prices for August 2023. The revised retail pump prices of petroleum products are as follows:
Petrol: from K24.93/litre to K25.57/litre (an increase of K0.64/litre)
Diesel: from K23.36/litre to K24.93/litre (an increase of K1.49/litre)
Kerosene: from K20.44/litre to K22.35/litre (an increase of K1.91/litre)
Jet A-1 (at KKTA): from K20.35/litre to K22.56/litre (an increase of K2.21/litre)
For major airports, the posted airfield prices (PAP) for Jet A-1 are as follows:
Lusaka (KKIA): K22.56/litre
Mfuwe: K23.77/litre
Livingstone (HMNIA): K23.37/litre
Ndola (SMKIA): K22.56/litre
The ERB urges the public to take note of the new prices, which come into effect as of midnight, Monday 31 July 2023.
