Fuel climbs again as the tax holiday ends, and VAT is next

Zambians are paying more at the pump for the second month running. The Energy Regulation Board (ERB) raised petrol to K33.06 a litre and diesel to K34.45 from midnight on Saturday, as oil prices climbed and the kwacha weakened. The increase lands just weeks after excise duty on fuel returned at the end of a six-month tax holiday. VAT on petroleum products is due back on 1 December, which means another push on pump prices is likely before Christmas. Elsewhere, annual inflation edged up to 6.3 per cent in October, the stock exchange slipped and copper held near record levels. Here is what moved, why, and what it means for your pocket. | Indicator | This week | Last week | Change | | --- | --- | --- | --- | | Kwacha per US dollar | K20.17 | K20.11 | Kwacha 0.3% weaker | | LuSE All Share Index | 25,070 | 25,134 | Down 0.25% | | Petrol (per litre) | K33.06 | K31.46 | Up K1.60 | | Diesel (per litre) | K34.45 | K33.27 | Up K1.18 | | Annual inflation | 6.3% (Oct) | 6.1% (Sept) | Up 0.2 points | | Basic needs, family of 5, Lusaka | K11,400 (Sept) | K12,001 (Aug) | Down K601 | | Copper (US$ per tonne) | 14,449 | 14,415 | Up 0.2% | ## Fuel: petrol up K7.77 a litre in two months The ERB's November review raised every petroleum product. Petrol rose K1.60 to K33.06 a litre and diesel K1.18 to K34.45. Kerosene, which many households use for cooking and lighting, jumped K2.32 to K32.08. Jet A-1 rose to K34.51. ERB board chairperson James Banda said international oil prices kept rising through the review period because of continuing tensions in the Middle East. The average price of petrol on world markets rose from US$121.58 to US$125.84 a barrel. A weaker kwacha made every one of those dollars cost more. The bigger story is the tax. From April to September, the government suspended excise duty on fuel and zero-rated VAT to cushion households. When that holiday ended, October prices jumped by more than K6 a litre in one go. Add the two increases together and petrol has gone