Fuel hike is an open scandal – Sata
By Patson Chilemba and Chiwoyu Sinyangwe
Thu 14 Jan. 2010, 04:01 CAT [7962 Reads, 7 Comment(s)] Text size Print
Patriotic Front (PF) president Michael Sata
PATRIOTIC Front (PF) president Michael Sata yesterday said he has been vindicated over his recent revelations that President Rupiah Banda would increase fuel prices, saying Zambians will now subsidise the President’s corruption.
And economic consultant Professor Oliver Saasa has said the 15 per cent hike in fuel prices is too sudden and a threat to recent economic gains such as reduced inflation.
Commenting on the Energy Regulations Board’s 15 per cent fuel increment, Sata said he had been vindicated over the revelation he made on November 26, 2009 that President Banda was about to hike fuel prices because he wanted Zambians to begin subsidising thieves that are involved in fuel procurement by increasing the pump price.
“The fuel prices have been increased, so I have been vindicated. You are paying for corruption. I told you Rupiah Banda would like to see Zambians pay for corruption. He doesn’t care about Zambians. He has never cared since he was born. He has never cared for other people’s interests, he believes in maximum enjoyment and minimum or no responsibility. He is only interested in his pockets,” Sata said. “There is no justification about hiding the hike in the international market. The reason is Rupiah Banda’s contacts settled for bringing in refined oil products, and they are more expensive. We have Indeni, why not use it? It is an open scandal. The point is when international oil products have increased, if we brought crude oil, it is not as expensive as refined oil.”
Sata charged that President Banda deliberately used a shortcut by closing Indeni so that he could allow his friends to bring in refined oil.
“We have survived in the last 45 years, or 43 years since we built Indeni even if the international crude oil has increased, because we bought crude oil and refined it ourselves, we managed to cushion the impact on the pump prices,” Sata said. “Rupiah Banda wanted a shortcu; he deliberately closed Indeni and allowed his friends and agents to bring refined oil products. And when you are bringing refined oil products, the consequences are what you have.”
Sata said going by President Banda’s misconduct over the matter, ERB was left with no choice but to increase the fuel prices, saying had they not done so the country would have faced fuel shortages.
“And the oil marketing companies warned, you remember I told you that refined oil products will not land at the price this government is talking because this government gave 25 percent tax incentives, and they said that might cushion the impact on diesel but not petrol. So that is what Rupiah Banda wanted,” he said.
Sata said Zambians would now suffer because the prices of essential commodities would increase on account of the hike in fuel prices.
And PF spokesperson Given Lubinda said the celebration on the reduction of inflation had been short-lived because inflation was likely to go up on account of the hike in fuel prices.
“We said that was politically motivated, and was not backed by any economic figures. We are being vindicated…we have a fuel reserve fund to which all oil marketing companies contribute. That fuel reserve is supposed to cushion Zambia against international parity prices on fuel. Unfortunately, it is being used for all other purposes except for the one for which it was established,” said Lubinda. “All this is because he President Banda has become the director general of everything, including beans for hospitals. People have to apply through Rupiah Banda. All citizens see are brown envelopes. If Zambians continue to keep quiet, I am afraid by the time Rupiah Banda is finished with us, the country will be on its knees.”
And Prof Saasa explained that the 15 per cent hike in fuel prices was going to result in at least 20 per cent rise in prices of all essential goods and services in the country.
“The bottom line is that this increase threats to reverse the recent economic gains,” Prof Saasa said. “For instance, we are going to see an increase in inflation, gross domestic product is going to reduce from what is being projected because the cost of input in the production line will go up…so this 15 per cent increase is worrying because it is going to lead to prices to skyrocket…what is going to happen is goods and services are going to go up by at least 20 per cent.”
Prof Saasa said there was need for the country to devise a plan that would ensure that future hikes were spread over long period, and help key productive sectors to prepare for the changes.