THE Energy Regulation Board (ERB) announced the upward adjustment of petroleum products and the increment of was effected on Tuesday September 24, 2019.
ERB attributed the increase to depreciation of the Kwacha and the increase of the price of fuel on the international market.
Diesel was increased from K13.43 to K14.23 per litre, petrol from K15.20 to K15.98 per litre and low sulphur diesel from K15.72 to K16.52 per litre. Kerosine was also increased by K1.68 per litre.
As if the above is not bad enough, Zesco is proposing to increase electricity tariffs.
The increase in the pump price of fuel and the upward adjustment of electricity tariff will have adverse effects to individuals and the entrepreneurs as well.
Firstly, the cost of doing business will be high. This is because production of goods and services by and large, depend on electricity. If there is an increase in the electricity tariff, there will be a corresponding increase in the prices of goods and services.
Secondly, the increase in the price of fuel ultimately leads to high prices of goods and services as well. The consumers of these goods and services especially those in the lower income bracket will face the adverse effect of high prices. On the other hand, public transport will also become costly owing to increased bus and taxi fares.
Thirdly, the economic activities in the country will plummet because of high cost of production which will lead to low production of goods and services.
Fourthly, the mining and manufacturing sectors will also be adversely affected and this will lead to job losses. When people lose jobs, the trickle-down effect is that families will be affected.
In conclusion, people should brace themselves for tough economic times. There is need to exercise financial discipline and cut out unnecessary expenditure.