ZAMBIA: Higher fuel costs will drive up food prices
LUSAKA, 25 January 2010 (IRIN): A raft of fuel price hikes that will affect agricultural production costs as well as consumer pockets is expected to drive food price inflation in Zambia, where about two-thirds of the population live on one US dollar (ca. 5,20 DKR) or less a day.
The government has announced an immediate petrol price rise of 15 percent, soon after a 10 percent excise duty on diesel came into effect on 1 January 2010.
According to a World Bank study citing average prices when the oil crisis peaked in 2008, the landlocked country had the highest fuel prices in southern Africa.
With the new hike, petrol in the capital, Lusaka, will cost about 1,53 US dollar, an increase of 0,50 dollar, while diesel – primarily used in the mining and agricultural sectors – will now cost about 1,20 dollar a litre.
The harvest in April-May 2009 produced a surplus of 200.000 tons, but the Zambia National Farmers Union (ZNFU) said the diesel price hike was likely to “adversely” affect maize production in the coming season.
– You do not have to be a genius to know that every time fuel prices go up in Zambia, so do prices of mealie-meal (maize-meal), cooking oil (spiseolie), bus fares, and of course taxi fares, a taxi driver told his colleagues during a discussion at a rank in Lusaka.
– Perhaps we should demonstrate against the fuel-price hikes – take to the streets and let the system know we are very unhappy – in a peaceful manner? he said.
Maize is the staple food of about 80 percent of Zambians; a 25 kg bag of maize currently retails for about 14 US cent, but it is expected that this will soon rise to reflect the increase in fuel prices.
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