Tue, 25 Apr 2017 11:00:05 +0000
By AARON CHIYANZO
LEAVING the procurement of refined petroleum products to the private sector will lead a reduction in the pump price as it will be market driven, Movement for Multiparty Democracy (MMD) national secretary Raphael Nakacinda has said.
Mr Nakacinda said that some business persons had indicated that they had connections to source out petroleum product cheaply.
He explained that procuring petroleum products cheaply would enable the private sector reduce the pump price of fuel by a reasonable margin.
Mr Nakacinda said in an interview with Daily Nation that government was being forced to procure fuel at slightly higher prices because they needed to buy in bulk.
He pointed out that government had to consider suppliers who could provide the product in bulk even if not the cheapest.
Mr Nakacinda said that some business people would be able to source out petroleum products at much cheaper prices elsewhere.
“If the procurement is properly handled, we are likely to see a reduction in terms of prices of fuel because the market forces will determine the price. The oil companies will be striving to find cheaper products so that they can offer cheaper prices.
“When government has been involved, there has always being some kind of government regulation, the price being determined by the Energy Regulation Board but then which won’t be the case. Prices will be competitive and market driven” he said.
Mr Nakacinda said that leaving the procurement of fuel to the private sector will enable the country have a liberalized economy.
He explained the oil companies would be able to offer different prices and that consumers would be given the choice to buy from whoever was offering the product cheaply.
Meanwhile, Mr Nakacinda however warned that the exercise would come with its own challenges which included the provision of low quality fuels. He advised government to ensure that they put in place proper monitoring mechanisms in place before allowing the private sector to take over the procurement.
