Africa-Press – Zambia. The monthly fuel price reviews may be fine in principle and academic theory, but they assume a rational response from all stakeholders. They assume that pump prices will be increased proportionally when supply prices are increased and vice versa.
The downside however, is that pump prices are proportionally increased when a supply hike happens but the reverse does not follow. When supply prices are reduced, most businesses retain the revised hiked pump prices when the increase occurred.
So the assumption of a rational response does not hold. At the end of the day the consumer is continuously bearing the brunt of continuous price hikes. It makes planning for businesses very cumbersome as they have to adjust prices every month. Please abandon the monthly price reviews and revert to the old system. It’s too complex for a country like Zambia.
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