BOARD chairperson of the Regulation Board (ERB) Reynolds Bowa says oil marketing companies (OMCs) do push the Board to give them a cost-reflective price of fuel.
He said this when he featured on ZNBC TV’s Sunday Interview programme.
Bowa was asked if at all OMCs push the ERB to give them a cost-reflective price.
He answered that: “yes, that is what we are up against”
“But it is not an insurmountable challenge. Each partner in a business pushes their own agenda,” Bowa said.
“There is a disproportionate negotiating power between the supplier of the product and the consumer. Therefore, the Energy Regulation Board steps in.”
He said it is not strange for the industry to push to get the best return on their investment.
“It’s their responsibility to their shareholders. [But] our responsibility is to ensure that nothing goes in the price which isn’t fully justified and fair to the consumer,” Bowa explained.
Asked on what the ERB will do, since factors which impact the price of fuel (depreciation of the kwacha and international price of the commodity) are beyond the Board’s control, Bowa said: “sometimes we try to avoid unpleasant truth.”
“[But] the reality of the situation is that fuel is a foreign product. Every drop that we consume in this country needs to be imported. If that is the case, then we are subject to the price of the supplier of that product. That point relates to international price,” said Bowa.
“Because we buy fuel in dollars and because we sell in kwacha, the exchange rate is a factor that we cannot run away from. The reality of the situation is that also our government is fully aware of these issues. To the extent that the government can positively impact the exchange rate, then they must do so.”
Kalemba February 8, 2023
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