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Saturday, 21 July 2007

A new opportunity.....jet fuel pricing

A new opportunity for change on the fuel pricing front:

Government has asked the Energy Regulation Board (ERB) to review the fuel pricing framework in the country. Energy and Water Development Minister Kenneth Konga said the nation would be informed on the outcome of the review next month.

ZANIS reports that the Minister disclosed in a ministerial statement presented in the house today, on the fuel supply situation in the country. He said it is essential that the energy sector plays its strategic roles in steering the economy to prosperity as the country strives to reduce poverty and promote economic growth. He said government recently dissolved the ERB and Zambia Electricity Supply Corporation (ZESCO) boards in order to improve their operations. He said it is important that these key institutions are able to meet the challenges of the energy sector by being proactive and innovative.

The challenge now is for ERB to deliver a system that can improve the competitive position of Zambia in one of the key areas - aviation. The high jet fuel prices are preventing Zambia from developing its aviation and tourism sectors by keeping the operating costs unnecessarily high.

According to
ZEGA, jet fuel is 55% more expensive in Lusaka than in Jo'Burg. British Airways last year noted that their fuel costs were more than 40% more in Lusaka than in Jo'Burg. In June 2005 IATA examined the Zambia's high fuel cost prices and compared them to airports in the region, it concluded that Zambia's prices were between 12 and 40% higher. With that came the recommendation that Zambia should try and reduce the jet fuel prices by 20% as an initial step towards achieving a more reasonable and sustainable price structure - no progress has been made in taking this recommendation forward. To make it worse, Zambia also imposes VAT tax of 17% and 5% import duties. There's a case for reducing these for airlines if we are really serious about encouraging growth in the aviation and tourism sectors through cheaper travel.

1 comment:

  1. Whose jet are we leasing and asking about fuel? No body to fly with? Mfuwe lanstrip 'needs' an airport. or why can't he fly his helicopter from 'born' destinations on his passport.


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