Zambia is this month phasing out fuel subsidies as the measure is proving to be very costly, a government official has said.
The Post quoted secretary to the treasury Evans Chibiliti as saying here Tuesday that the government had since mid last year been spending an average of 15 million U.S. dollars per month on fuel subsidies, an amount that he said could be used for other key development programs in the country.
With the escalating oil prices and the government plans to stop subsidizing fuel, pump prices of the commodity are expected to rise above the current level.
"The government has been subsidizing fuel since around August or September last year. We were doing this for the period that we were putting in place an interim supply arrangement before arriving at long-term arrangements," Chibiliti said.
It is no longer feasible for the government to continue subsidizing fuel. In view of the global increase in fuel prices, it is important that the government uses that money that it has been spending to subsidize fuel for other economic projects, said Chibiliti.
He said other factors behind the decision to phase out the fuel subsidies were the conclusion of long-term supply and financing arrangement for crude oil importation.
On average, the current pump prices for petrol in Lusaka is around 7,700 kwacha (over 2 U.S. dollars) per litre.
Source:Xinhua
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