Ceremonial Vice-president Guy Scott says the recently announced fuel price increase is modest.
He was quoted by the PF vuvuzela, the Post.
Vice-President Scott said local fuel pump prices could decline in the next few months on account of expected appreciation of the kwacha against major convertible currencies and cooling crude oil prices internationally.
“In a market economy, every other country, South Africa, Britain, Zimbabwe, the price of everything goes up and down, so in Zambia, it is the same. So we can cushion here and there like we have delayed the increase of fuel prices, and the increase in the price of fuel is not commensurate with the increase in the price of the dollar, with the weakening of the kwacha, so it is a compromise.
It is half, half. So we have smoothed a bit but do not dream after a paradise which does not exist, that the price of fuel does not change from one century to the next. It doesn’t exist, maybe on Mars not here on Earth,” Vice-President Scott said.
He also said inflationary pressures expected to be fueled by increase in energy prices would be stemmed by the anticipated positive maize yield.
“The hike is a very limited hike. For example, the price of fuel changes every day, it goes up and down, we just have to see if we can keep it constant, but also in Zambia it will move up and down with exchange rate and the price of oil. So, there is nothing abnormal about it. It is a very modest increase,” he said in a telephone interview from Mfuwe.
“The price of maize, for example, and mealie-meal will come down as the crop comes over the next month or two. The price of mealie-meal will fall, the price of oil, yes, has gone up, but I mean the international price is also going down, so it might come down again. That is life in a free market economy. It is like a market, the price of tomatoes goes up, the price of tomatoes comes down and then it goes up and comes down.”
Vice-President Scott admitted there would be an increase in the general price of goods and service, but retailers should provide goods at the most economic price.
“Generally, most currencies inflate, like the dollar. So prices generally drift up, but we are not talking about hard inflation like in Zimbabwe where after (every) two months the prices are doubled. We are looking at a slow rate of inflation,” he explained.
“It inflation is a bit high at the moment because of the drop in the price of copper and the consequent weakening of the exchange rate, but there is nothing to be excited about. Everybody likes to make Kerfuffle about the prices, but we are allowed to make noise. I don’t think you can fight against market forces to an extent… we tried that and we failed. Kaunda tried that and we failed,” Vice-President Scott said.
“If the copper market is weak as it is at the moment, you waste too much trying to stabilise the kwacha to K5 for a dollar.”
Vice-President Scott ruled out the possibility of the government going back to subsidise fuel prices.
“You can’t respond to every complaint, every time there is one about the fuel price. We will consider what we will consider,” he said.