By ESTHER MSETEKA
May 6th, 2013
THE Economics Association of Zambia (EAZ) has advised Government to revise the oil procurement process by making it more transparent and efficient.
Last week, Government increased the price of petrol and diesel by KR1.75 (K1, 750) per litre and KR1.63 (K1, 630) litre respectively while kerosene has been adjusted upward by KR1.68 (K1, 680). But, EAZ president Isaac Ngoma said fuel, being a key factor in production and delivery of goods has a significant bearing on the cost structure of consumer prices. Mr Ngoma said there is need to curtail middle-men in the procurement process of for the commodity to be bought at a reasonable price.
“EAZ is of the view that the oil procurement process must be revised to make it more transparent and efficient so that we can procure the product at a good price from credible sources without middle men being involved,” he said.
Mr Ngoma said this in a press response in Lusaka recently. He said the association stands to support economically sound measures that may seem to hurt the nation in the short-term but have pronounced benefits in the long-run.
He said Government has explained the rationale behind the increase, thus the removal of the subsidy which has been in place for a long time.
“We all must know that such subsidies are unsustainable for a small economy like ours and has for a long time imposed significant pressure on the treasury.
The meager resources available are much needed to meet other social needs like in health and education,” he said. Mr Ngoma, however, said due to the raise in fuel prices there is an anticipated increase in the prices of goods and services while the cost of transport will directly affect enterprises and the travelling public.
Mr Ngoma said ultimately, the effect will impact on the inflation rate as price adjustments are inevitable.