Minister of Energy and Water Development David Mabumba said the government will now be able to save this money following the scrapping of fuel subsidies last week which will be channeled toward other economic recovery programs.

“In 2016, for instance, government paid 89 million dollars in the first quarter, 72 million dollars in the second quarter and 57 million dollars in the third quarter. In total, over 200 million dollars has been paid towards fuel subsidies. This became a burden and unsustainable on the treasury,” he said in a ministerial statement presented to parliament.

The Zambia minister said domestic prices of fuel were mainly determined by international oil prices and the exchange rate of the local currency, adding that the country’s energy regulator uses a cost-plus model for determining fuel prices.

Last week, the government scrapped off fuel subsidies, a move that has seen fuel pump prices increasing by 38 percent.

The removal of the subsidies was part of the government’s economic recovery program. Enditem

Source: Xinhua/NewsGhana.com.gh

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