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Govt buries hope of any fuel subsidy return, says doing so would be injurious to economy


Finance and National Planning Mimister, Situmbeko Musokotwane, has promised various reforms to spur the energy sector during the 2024 budget presentation in parliament on Friday.

To mitigate the high cost of transporting petroleum products, the government was looking at the successful conversion of TAZAMA Pipeline from a petroleum feedstock to a low sulphur diesel carrier.

“Government has now developed regulations to enable players in the sector to have third party access to the TAZAMA Pipeline,” Musokotwane stated.

Part of the budget pronouncement in the energy sector is the enhancement of competition among the suppliers, which might ultimately benefit consumers.

He also called on the private sector to take advantage of the open access and participate in the supply of petroleum products.

“Further, I call upon the private sector to invest in a new pipeline to increase the volume of fuel that can be imported through the pipeline,” the budget speech read.

Read more : Breaking! Price of diesel falls, to sell for K26.28 in April, as TAZAMA pipeline back on stream

On the mounting pressure from citizens and other stakeholders to reintroduce fuel subsidy, Musokotwane maintained doing so would mean abolishing free education which the government could not afford to let off.

“I hear of some citizens calling for the re-introduction of subsidies on fuel. If adopted, this of course means that we must cut expenditure elsewhere. In practical terms, it may mean abandoning the policy of free education, or failing to hire teachers or doing away with the Constituency Development Fund (CDF) ,” he insisted.

On the electricity subsector, government says it is implementing measures to increase electricity generation capacity which currently stands at 3,790 megawatts.

“To enhance growth of the electricity sub-sector, government is providing incentives to attract investment in power generation,” he stated.

Other tax incentives in the clean and energy sector would include the removal of customs duty on electric motorcycles, electric vehicles, electric buses, electric trucks, and attendant accessories such as charging systems.

Other tax incentives are the reduction in excise duty to 25 percent from 30 percent on hybrid vehicles designed for the transportation of persons.

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