Zambia: Govt warned on uniform fuel price
Lusaka Times, September 23, 2010

Consumer Unit Trust Society (CUTS) international has warned the Zambian government against effecting price controls as it introduces the uniform pump prices of fuel on the market.

CUTS centre coordinator Patrick Chengo said that if government allows its own price controls to flood the market, it is clear that the UPP will only cause more harm than good.

“This is because price controls will limit the benefit of the consumer and affect the competitiveness the sector,” Mr Chengo said

Mr. chengo said that there is need for government to realize that both the consumer and those competing for the same market benefit from its decision to unify the pump prices.

He said it is possible that if government’s decision affects the competitiveness in the fuel market, the demand might go high but the supply will drop owing to the fact that companies will decide to pull out.

“This is because price controls will limit the benefit of the consumer and affect the competitiveness the sector,” Mr Chengo said

Mr chengo also noted that currently, the urban consumer has been forced to subsidize the rural consumers because government did not implement its mechanism properly.

He has,therefore, called for a further reduction of the prices to ensure that the benefits are felt by everyone across the country.

Mr Chengo noted that with the threats that the price controls under the uniform pump price poses on the competition, there is need to drop the prices further down.

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