The folly of the new fuel policy has come home. As I noted in previous discussions, the recent fuel tax adjustement will do little to benefit rural users with no access to cars. The beneficiaries are car users and bus operators. Car users benefit directly because the law requires a corresponding reduction at the fuel pump. However, ultimately even they get to pay for this through taxes, though clearly subsidised by non-car drivers! The real losers are likely to be the rural poor. Not only has kerosene been reduced by a very small amount and therefore immaterial, the rural poor will not see the reduction directly because they use buses. To add insult to injury, they will be pay for car drivers through the worsening fiscal position. Correctly understood the measure is redistributive rather than a strong efficient measure :
Operators wont reduce fares (ZNBC News) : The Bus Transport Operators Association has no intention of reducing bus fares for local routes despite a recent reduction in the price of fuel.
Association spokesperson, Ishmail Khanhara, says the operators will maintain the current fares because they have not hiked charges in a long time.
Mr. Khanhara told ZNBC news that a decision not to reduce fares was arrived at during a meeting with officials from the Road Transport and Safety Agency. He said the bus operators instead negotiated for a three hundred Kwacha increment to enable them sustain their operations. Mr. Khanhara said most transporters are having difficulties in running their vehicles due to minimal profit margins.