Press Statement

Upward Adjustment of Petroleum Products Prices

29th October 2009

The Energy Regulation Board (ERB) wishes to inform the public that
prices of petroleum products have been revised upwards countrywide
with effect from midnight tonight.

Diesel has been increased by K548, Petrol by K1,114 and Kerosene by

K383, which changes benchmark prices for Lusaka to K6,026 for
diesel, K6,932 petrol and K4,217 for Kerosene.

This price change has been necessitated by oil price increases on the
international market and also the inclusion of a K65 per litre cost line
that has been introduced to finance the cost of holding 15 days
statutory operating stocks by all Oil Marketing Companies (OMCs).

Oil prices on the international market have increased to US$77/bbl on

the New York Mercantile Exchange as at 15th October 2009, compared
to US$35.98/bbl on 18th December 2008 that was used for the last
price review in December 2008. The current international price has
slightly moderated from the highest oil price of $82/bbl recorded on 22
October 2009 and expectations are that prices for the rest of the year
will not rise to levels witnessed in 2008 due to the global economy
which is still recovering from the recession.

Despite the changes in the international prices of oil and the

depreciation of the kwacha against the United States dollar between
December 2008 and July 2009, petroleum prices have not been
adjusted in Zambia due to Government subsidy amounting to US$30.3
million dollars.

With regard to the 15 days operating stock cost line, this has been
introduced in order to ensure that all OMCs comply with the provisions
of Statutory Instrument No. 90 of 2005 that compels OMCs to hold 15
days operational stocks so as to cushion the economy from petroleum
products shortages whenever the INDENI refinery shuts down. However
some OMCs have not been compliant with this requirement and the
ERB has taken legal enforcement action against such OMCs.

The current price review has also been necessitated by the importation
of refined petroleum products during the on-going shutdown of INDENI
1
Oil Refinery for its annual maintenance. In the interim Government has
contracted Dalbit and Independent Petroleum Group (IPG) to import
the commodity. OMCs have also been requested to import refined
products following the temporary suspension of import duty by the
Government.

Indicative pump prices which are based on Lusaka and Ndola

Benchmark prices are detailed in the table below:

Table 1: Indicative Pump Price Changes including 15 Days Cost-

line

ABSOLUT
LUSAKA PUMP
E %
PRICES K/Litre
VARIANCE CHANGE
PRODUCT Current New K/Litre
Petrol 5,818 6,932 1,114 19.15
Diesel 5,478 6,026 548 10.01
Kerosene 3,834 4,217 383 10.00

MR. LUKONDE T. MFULA

ACTING / EXECUTIVE DIRECTOR