Oil marketing companies (OMCs) and other suppliers of liquified petroleum gas (LPG) risk being regulated and prices set for them if they continue failing to pass on price benefits to customers, the Energy Regulation Board has warned.
ERB board chairman James Banda sounded the warning today during the energy status update in Lusaka.
Banda said the ERB has met and discussed pricing with the OMCs and asked them why gas prices were being frequently adjusted.
“The government has put in measures to help reduce the cost of the importation of solar products and LPG. Our ask has always been that the benefits must be passed to the ultimate consumers,” said Banda.
He stated that there shouldn’t be an argument around that. “If you’ve received a tax exemption, you must pass that benefit down to the ultimate consumer.”
Banda said the ERB does not want to see gas prices going up every week simply because there’s demand.
“We don’t want to see prices being regulated and set by the ERB. We believe that businesses with a long-term vision should self-regulate.”
He lamented that while the government had given several concessions, with more having been approved a few days ago, to promote the adoption of alternative energy solutions, suppliers of solar kits and LPG were failing or neglecting to pass these benefits on to consumers.
He explained that the ERB’s role was to balance the interests of the OMCs by ensuring that the environment allows them to invest more because investors require an environment that allows them to make a profit but in achieving that they should not exploit customers.
“LPG is a growing market and we need more of it so we need more investment but we can regulate it in consultation with consumer groups and all stakeholders, we can ask them whether to regulate,”
Banda emphasized that the power crisis has affected the whole country, therefore, we all have to work together as one to find solutions. “Not all of us can afford solar and other alternatives, that’s agreed, but those who can let’s move in that direction as it will give relief to the grid. That way, the little that ZESCO is producing can go to those who can’t.”
As Zambia continues battling dire electricity insufficiency, more consumers are turning to LPG for their cooking requirements, taking the demand upwards. Suppliers have taken to very frequently raising prices in the face of that demand.
