The Ministry of Finance in Africa’s red metal hotspot Zambia revealed that its suspension of some taxes on petroleum products has continued to provide a buffer for the upward pressure on fuel prices. This was contained in the MinFin Head Dr. Musokotwane’s presentation on the 1Q22 performance of the Southern African nations economy.
“The current fuel prices do have a subsidy component from the suspension of tax on petroleum products. Some taxes on petroleum products have been suspended for a while,” Musokotwane said.
In December of 2021, the red metal producer announced a rethink to its fiscal purse after implementing a subsidy extermination on petroleum products as it sought to maximize its economic production possibilities. This marked the genesis of the monthly price reviews on fuel pricing and reflecting international crude prices.
READ ALSO: Zambia Reshuffles Fiscal Purse In Subsidy Cut, Sends Petroleum Prices 25% Higher
Zambia continues to bear the brunt of rising global crude prices currently trading above $100 a barrel a 25% climb compared to the 2021 yearend levels. International crude Prices rallied to 14 year highs on supply bottlenecks and a post pandemic global demand spiral that saw pricing scale to $140 a barrel but was eventually moderated by the US action to release a million barrels daily from its strategic reserves to ease pressure.
The Southern African nation in its last energy price review on April 01 adjusted its petroleum pump prices by a fifth following elevated crude prices. Inflationary pressure has continued to brew and risks eroding the inflation gains posted over the last one year.
The Kwacha Arbitrageur