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Energy Consultant, Johnstone Chikwanda, has warned that a new K3 per litre fuel surcharge imposed by the Energy Regulation Board (ERB) could disrupt the stable tax and pricing arrangements in Zambia’s mining industry.
The ERB introduced the surcharge on imported fuel as a Stabilisation Fund contribution to the Energy Fund.
Chikwanda told Zambia Monitor that the country consumed roughly 260 million litres of diesel and petrol per month, which would generate about K780 million monthly for the Stabilisation Fund.
He noted that this was in addition to the Fuel Strategic Fund, which levied K0.15 per litre and contributed approximately K39 million per month.
“The purpose of the stabilisation fund is to anchor the policy shift from monthly fuel pump price reviews to a three-month review cycle,” Chikwanda said.
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Under the policy, the Stabilisation Fund is expected to accumulate to K1.56 billion over three months, while the Fuel Strategic Fund would reach K117 million in the same period.
Chikwanda cautioned that some fuel consumers, particularly mining companies, operated under bilateral pricing agreements with fuel suppliers that already allowed price reviews over multi-month periods.
He said imposing the K3 per litre surcharge on these agreements could undermine existing tax and pricing structures.
“To this end, I wish to caution against stretching the surcharge to consumers who already have bilateral agreements with provisions for long periods before effecting price changes,” he said.
Chikwanda added that the surcharge could cost major mining companies about K70 million per month, translating to K840 million annually.
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