MINES TO BENEFIT FROM PRICE SLASH ON LOW SULPHUR GAS OILS


Zambia’s oil regulator, the Energy Regulation Board - ERB has announced a price reduction on the cost of Low Sulphur Gas Oils - LSG effective midnight Friday 30th January 2015. 
The reduction is by 83 Ngwee per litter, translating into 7.78 percent, while the wholesale price has been reduced by 11.53 ngwee per cubic metres or 0.16 percent.
Consumers of low sulphur gas oils are now geared for a price reduction that comes about a forty night after fuel pump prices were reduced by nearly 30 percent.
“The current Low Sulphur Gas Oil - LSG was purchased when the international prices were still on the downward trend. Therefore, consistent with the recent price adjustment for other petroleum products, the benefit of the continued drop in the international oil prices is now being extended to the wholesale and pump price for LSG,” ERB Board chairperson Geoffry Mwape said in a statement.
For motorists of Low Sulphur diesel this move was long awaited.
“A full tank of fuel was costing 350 kwacha but now I pay about 260 kwacha my car tank is full, so for me the new pricing means more money in my pocket,” said one of the motorists in Lusaka.
Zambia Chamber of Mines among other stakeholders like mining companies have in the recent past been calling on government to consider reducing the cost of low sulphur oils as it is a major ingredient in determining the cost production in the mining sector.
Now with the changes one expects the cost of production in the mining sector to be reduced by some margin.
Low sulphur gas oils is a more advanced and friendly oil to modern equipment, was introduced on the local market in 2010.
The energy regulation board has indicates that as global oils prices continue falling the institution will also continue extending the benefit to consumers. 
However , as world oil prices fall, there are still other fixed costs within the pricing model which remain constant such as freight, pipeline fees and refinery cost and taxes, and these factors can not not be ignored in determining the fuel cost.
As the cost of fuel continue to go down the ripple effects on the economy is that the cost of production in various sectors will also be lowered, and this will lead to cheap goods on the market.

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