ZAMBIA is not insulated from the deepening conflict in the Middle East, and the biggest shock will be felt from the pump prices and ultimately the cost of living, economist Kelvin Chisanga has warned.
The conflict between the United States and Iran escalated into a direct, large-scale war following joint US-Israeli military strikes that focused on Iran’s nuclear facilities, ballistic missile production, and led to the death of Iranian Supreme Leader Ali Khamenei and other senior leaders.
According to the US Department of War, over 1,250 targets were hit in the first few days of the conflict.
Iran has launched retaliatory missile and drone strikes against US and allied facilities in Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE, making the Middle East unstable, with war projected to go on for weeks.
Chisanga says the crisis involving Iran has rattled a region that controls a critical oil corridor supplying close to a third of the world’s crude oil, making price shocks almost unavoidable for fuel-importing countries like Zambia.
“The Middle East has got a very important corridor which supplies about 30 percent of oil to the global market, and already we have seen oil prices lose about 10 percent within a very short time,” Chisanga said.
He explained that while Zambia had just begun to enjoy marginal relief following the Energy Regulation Board’s fuel pricing review, those gains now risk being wiped out by global instability.
Fuel prices have seen back-to-back reductions over the last two months, primarily driven by a strengthening Kwacha. Petrol has gone from K29.92, in January, K27.88 in February and currently at K26.61.
Meanwhile Diesel prices are currently K23.25, from K25.11 in January and K24.50 last month.
“Whatever gains we have made through the fuel pricing review will not work in our favour if we start receiving sharp changes in the global fuel price structure,” Chisanga said.
The economist warned that fuel remains one of the most aggressive drivers of inflation, with direct spillover effects on food prices, transport costs and production.
“In February alone, fuel contributed about 0.3 percent to inflation, so once fuel prices start rising again, the spillover effect will be felt across the economy,” he said.
He noted that even positive developments such as strong copper prices and relative stability in the foreign exchange market may not be enough to counterbalance fuel-driven inflation.
Chisanga added that the exchange rate is also at risk, as fuel costs directly affect both production and consumption, which in turn influence demand for foreign currency.
“Once fuel costs go up, the fundamentals on the forex market also start responding in the same pattern, because fuel is a key input into production and consumption,” he said.
On household welfare, Chisanga painted a grim picture, saying the cost of living is likely to rise further if the conflict escalates..
He recalled that a fuel hike in December was enough to reverse a downward inflation trend, showing just how sensitive the economy is to energy prices.
Looking ahead, Chisanga said Zambia has limited policy options to act as a cushion for households and businesses, with strategic reserves remaining the main buffer.
“The only key instrument we currently have is the reserve position of about US$5.5 billion, but that alone is not enough,” he said.
He urged authorities to urgently explore alternative fuel supply routes and regional options to reduce exposure to global shocks.
“We need to look at alternative sources of supply, including opening up regional markets such as Angola, to avoid facing a severe fuel situation in the country,” Chisanga said.
As the Middle East conflict shows no sign of easing, the economist warned that Zambia must brace for tougher economic conditions, with fuel once again threatening to undermine growth, stability and household income.
By Haggai Hamunyemba
Kalemba March 3, 2026
