Manufacturers cry out over hike in fuel price

Zambia Association of Manufacturers (ZAM) has said the recent increase in fuel prices raises serious concerns because it is a key input for the sector.

The situation has been made worse with the current load management schedule implemented by ZESCO as most manufacturers rely on diesel generators to keep them running when they have no electricity.

This is according to Zambia Association of Manufacturers (ZAM) Chief Executive Officer Muntanga Lindunda.

“”The increase in the pump price of diesel, therefore, increases the generators’ operating costs and production cost.

“Additionally, the increase in the price of fuel will potentially lead to increases in transportation and logistics costs,” Lindunda said

She said the impact of this increase in pump prices on manufacturers was therefore negative as production and transportation costs would both increase simultaneously.

Lindunda indicated that the manufacturers face difficulties in immediately raising prices to cover increased business costs.

“Fierce competition from imported products makes it challenging for manufacturers to hike their prices, as it could result in loss of customers.

“To remain competitive, manufacturers often choose to keep prices stable, accepting reduced profits instead,” she said.

Lindunda said the current fuel pump pricing had a negative impact on the business landscape by causing uncertainty for manufacturers, making it difficult for them to plan for the medium to long-term production.

To mitigate these negative effects, she recommended a quarterly price revision, which would provide the industry with a degree of stability and allow for better planning.

On Tuesday, the Energy Regulation Board (ERB) announced the increase in pump prices for petroleum products, with the per litre price of Low-Sulphur Diesel increasing from K26.44 to K K29.25 and Petrol increasing from K24.49 to KK27.22.

Furthermore, the per litre price of Kerosene increased from K19.98 to K22.29.

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