According to RMB, the revision will see the petrol price increase from 19.84 to 21.96 kwacha per litre while diesel prices will increase from 18.93 to 21.54 kwacha per litre. In arriving at its decision, RMB notes that the regulator cited the deterioration in both international oil price as well as currency between January and February.
Prices of international crude increased from an average of US$86.51/bbl in January to US$96.61/bbl in February while USD/ZMW weakened from an average of 17.24 in January to 18.07 in February, the investment bank shows. The revision is the third since December 2021 when the regulator instituted monthly fuel pump price reviews, in line with the broader strategy to move to cost-reflective fuel pricing.
International oil prices have increased by 55 percent from an average of US$62/bbl in February 2021 to an average of US$96.61/bbl in February 2022, while the kwacha has appreciated by 16 percent over the same period from an average of 21.56 in February 2021 to 18.07 in February 2022, according to RMB.
The bank says the latest revision to adjust pump prices upwards by 25 percent y/y suggests that further hikes may be on the cards, especially if oil prices remain elevated. “With geopolitical tensions intensifying between Russia and Ukraine, and with the kwacha expected to trade on the back foot against the greenback, we expect a further upward adjustment at the next pump prices review, which will be at the end of March 2022,” RMB notes