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The Inter-Africa Governance Network (AFRINET) has called on government to revert to quarterly review of pump prices of fuel, saying the current situation of monthly reviews was not ideal.
The organization’s Executive Director, Maurice Malambo, argued that the monthly review of pump prices of fuel was not ideal at the moment because the constant fluctuations in the petroleum pump price could potentially generate uncertainty.
Malambo warned in an interview on Tuesday with Journalists that the economy could potentially slide into operating in a speculative mode if the current uncertainty continued.
This, he said, would make the players in the economy fall prey to the practice of price mark up.
He also mentioned possible erosion of profit and capital resulting in the general increase of commodity prices.
“This implying that the high commodity prices are artificial, consequently leading to artificial inflation currently at double digit of 10.8 percent from single digit 9.3 percent,” he said.
Malambo said the firm suggested to government last year the need to introduce a petroleum pump price stabilisation fund.
“The Fund is not a subsidy because it is not consumed in the economy, instead returned in the subsequent quarterly price review, failure of which the high artificial commodity prices may force the government to introduce a petroleum subsidy that is not sustainable and a distortion in the economy,” he argued.
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