Economist Kelvin Chisanga has warned that the latest increase in fuel prices could push up transport and distribution costs, with knock-on effects on food prices, business operating costs and household budgets. The Energy Regulation Board (ERB) has increased the price of petrol from K25.29 to K31.46 per litre, while diesel has risen from K26.86 to K33.27 per litre. The latest adjustment represents an increase of K6.17 per litre for petrol and K6.41 per litre for diesel. Commenting on the development in response to a press query by Peza News, Mr Chisanga attributed the increase to higher international petroleum prices, the depreciation of the Kwacha and the reinstatement of excise duty. “Diesel is particularly important because it feeds directly into transportation, agriculture, mining, construction, manufacturing and logistics. The adjustment reflects higher international petroleum prices, Kwacha depreciation and the reinstatement of excise duty,” Mr Chisanga said. He said the temporary suspension of excise duty and zero-rating of Value Added Tax (VAT) between April and September had helped cushion consumers from higher fuel prices, although the measures resulted in government foregoing tax revenue. Mr Chisanga said the immediate concern was the potential for higher fuel prices to trigger second-round effects across the economy. “The challenge now is managing the second-round effects. Higher fuel costs can increase transport and distribution expenses, eventually putting pressure on food prices and household budgets,” he said. He said Government should now shift its focus from simply managing pump prices to addressing the broader structural challenges that make the economy vulnerable to changes in fuel costs. According to Mr Chisanga, greater energy diversification, more efficient logistics, increased agricultural productivity and stronger economic resilience would be critical in reducing the wider impact of fuel-price adjustments. “Zambia has achieved important macroeconomic stability, but the real test is whether that stability can become a production dividend: lower business costs, increased investment, stronger exports, jobs and improved household welfare,” he said. Mr Chisanga said fuel-price adjustments should be managed in a way that does not undermine Zambia’s transition from economic stabilisation towards production-led growth. “The policy focus should therefore move beyond simply managing pump prices towards energy diversification, efficient logistics, agricultural productivity and stronger economic resilience,” he said.