Govt subsidising fuel as prices expected to go up

The Zambian government is currently subsidising fuel and pump prices are expected to rise in the next two weeks a government official has disclosed. Speaking in an interview, the official who declined to be named for fear of being dismissed for talking to the Zambian Watchdog said government is procuring fuel at an exchange rate of 1 US to K 6 or 1US $ to K6000 un rebased while Oil Marketing Companies are buying the same fuel from Indeni at an exchange rate of 1 US$1 to K5.6 or 1US $ to K 5600 un-rebased. The source said this means the government is subsidising K 0.4 per litre of fuel. The source said the reason is because of the weak Kwacha. The source said Oil Marketing Companies or OMC’s as they are commonly known in the energy sector are buying at a cheaper price because they had already paid for fuel in advance before the Kwacha became weak. “OMC’s paid for fuel sometime back when the exchange rate was 1 Dollar to K 5600 un-rebased but the government is purchasing fuel at exchange rate of 1US $ to K 6000 unrebased. So in short fuel subsidy is back but as usual it is Donchi Kubeba” the source said. The source who is very senior government official said the PF government is showing serious signs of economic failure.
And the source said government can not afford to cushion the effects of a weak Kwacha and will have no option but to increase the pump prices by about 11 per cent.
“This government is broke. So it can not continue silently subsidising fuel. It will have no option but to increase pump prices by 11 per cent very soon. Unless they divert money from somewhere. That is the status as at now. Please inform the general public. You have become our best source of information dissemination” the source said.

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