Africa-Press – Zambia. Government has maintained that the recent removal of subsidies and tax incentives on some petroleum products was inevitable as it was an important measure to actualizing the economic reform which Zambia is currently going through.
Director and Spokesperson in the Ministry of Information and Media, Thabo Kawana told ZANIS today that before the hike, the prices of petroleum products were artificial. He said prices did not correspond with the trends on the international market and exchange rate.
Mr. Kawana explained that due to the continued subsiding of fuel prices, government was spending about 67 million United States Dollars per month and over US$ 800 million per year on fuel subsidies.
He added that government also accumulated a debt of US$500 million owed to Oil Marketing Companies for the supply of the commodity. Mr. Kawana said the government had to take the hard decision of removing subsidies on fuel in order to save resources for other equally important sectors such as health and education.
He explained that the savings from the removal of subsidies and tax incentives on petroleum products will be allocated to the constituency development fund and used for the recruitment of teachers and health personnel in the country.
Mr. Kawana has, meanwhile, expressed optimism that once the economic reforms are done in the next two to three years, Zambians will feel the benefits of the decisions which are being undertaken currently.
He has since appealed to Zambians to exercise patience as government is working on restoring the economy that will result in improved development and wellbeing of people.
Last week, the Energy Regulation Board (ERB) announced an upward adjustment of pump prices of petroleum products between 3 Kwacha 54 Ngwee and 4 Kwacha 47 Ngwee following the removal of subsidies on the commodity.
Meanwhile, Economist Professor Oliver Saasa has urged the government to remove middlemen in fuel procurement in order to reduce the cost of the commodity following the removal of subsidies.
Professor Saasa said that the removal pf middlemen will also mean reviewing the tender process to ensure that the right bidders for the supply of fuel are awarded the contracts.
He said the government should also thoroughly explain why it was necessary to remove subsidies on fuel and electricity before its good intentions are misunderstood by the ordinary Zambians.
Professor Saasa said the recent removal of subsidies on fuel is a necessary evil which the country needed but said the government must also come up with measures which will help lessen the impact of such a move on ordinary Zambians.
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