Fuel price increase feared

The effects of a fire at Zambia's only oil refinery this week would be felt in about a month when the current stocks run out, an economic expert told IRIN on Wednesday. The Indeni refinery in Ndola was partially destroyed on Monday after an explosion during maintenance work. Zambia imports its crude oil from the Gulf states for processing at the refinery. The refinery, which produces an estimated 24,000 barrels of oil a day, has now stopped production as a result of the fire and will be out of operation for at least three months, the expert said. "As soon as the current stocks are depleted, which is expected to be within a month, there is bound to be a fuel price increase because of the need to import oil," he said. "The effects of an increase in fuel prices will be felt in the whole economy," the expert said, adding that the country's current foreign exchange reserves are at their lowest. This, according to the expert, points to an upward trend in Zambia's inflation rate which stood at 28.5 percent in March. Media sources told IRIN this was the fourth fire in 10 years to hit the refinery. "However, we seem not to be prepared for this eventuality because every time this happens, fuel prices increase, thereby causing a spiral in the prices of goods and services."