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Higher fuel costs will drive up food prices

Maize in the market is unaffordable for most Malawians
(Jaspreet Kindra/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 US$1 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 US$1.53, an increase of US$0.50, while diesel - primarily used in the mining and agricultural sectors - will now cost about US$1.20 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 don't 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, 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 25kg bag of maize currently retails for about US$14, but it is expected that this will soon rise to reflect the increase in fuel prices.



Low wages



About 500,000 formal jobs exist in Zambia, which has a population of about 11.7 million, and government is one of the largest employers - most government workers in the lower income bracket earn about US$200 a month.



Opposition parties have seized on the fuel price hikes ahead of scheduled elections in 2011, while the government of President Rupiah Banda has maintained that the increases were in line with global fuel prices rising from around US$40 per barrel in 2009 to about US$80 per barrel in 2010.



Michael Sata, leader of the Patriotic Front, the largest opposition party, told local media: "This is a clear indication that Banda and his cronies have failed to run things in this country, starting from the public service to the delivery of simple services such as fuel supply."



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This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

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