Petroleum prices ruling for May in Africa’s red metal hotspot Zambia, could ebb by 4.05% after taking a cue from the previous months Kwacha bulls offsetting the slowdown in global Brent prices. The Energy Regulation Board is expected to announce petroleum prices for May on Sunday 30th April.
The month of April saw the currency in the Southern African nation post gains fueled by widening hopes of a debt restructure whose discussions have protracted causing market fatigue. The copper currency reacted to corporate players offloading foreign exchange on word that China had eased its unrealistic demands of requesting that multilateral development banks share in haircut losses as all other creditors. Month on month, the Kwacha rallied 10.31% as part of a winning streak that ended a 122-day losing streak.
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In the crude markets, international global prices were weighed by weak Chinese data and a grim global outlook earlier in the month but were given a boost on further US Fed rate hike likelihood next week. Brent prices are currently at $77.77 a barrel as the Kwacha trades for 17.53/17.87/USD.
“We expect a K1.12 (4.05%) drop in the average pump to K26.47 per litre based on 01 May 2023 prices. The strong rally in the Kwacha offsetting in part an average rise in crude prices will likely result in a decline in May ruling prices,” ZATU Financial Services Managing Partner Munyumba Mutwale said in a note to clients.
The decline in petroleum prices is expected to ease price pressures and support a rebound in manufacturing activity. Zambia’s purchasing managers index for March slid into contraction at 46.9 from 51.3 as price pressures widened.
The Kwacha Arbitrageur