Mabumba makes case for electricity tariffs hike

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MINISTER of  Energy David Mabumba says Government will save about US$500 million which it spends on electricity subsidies annually if the proposed hike in power tariffs is approved.

Mr Mabumba said increasing electricity tariffs is an inevitable emergency for the country to attract investment, grow the economy and create employment opportunities for Zambians.

The minister said this in Lusaka yesterday during a media interactive forum organised by the Patriotic Front (PF).
“There is no need to politicise the increment in electricity tariffs because it is a national and not PF agenda. The tariffs need to be increased if Zesco is to make any investment,” he said.
Mr Mabumba said Zesco spends K9.7 billion annually while its profit is K6.4 million, which is not sustainable for the power utility firm to operate effectively.
He said the hike in electricity tariffs will enable Zesco manage its operations and explore other investment opportunities.
Mr Mabumba also said his ministry has started conceptualising a powering Zambia project aimed at taking electricity to rural parts of the country in a bid to attract investments in those areas.
“Rural areas have a lot of investment opportunities but most of them fail to take off due to lack of electricity in those areas, and as such we have ended up losing out,” he said.
Zesco has proposed to increase electricity tariffs by 75 percent and submissions to the Energy Regulation Board were concluded on Friday.
And Mr Mabumba said the Petroleum Act is being repealed to replace it with the Petroleum Management Bill which if approved by Cabinet, a tender will be floated for the private sector to start participating in the petroleum subsector.
He said Government has noticed inefficiencies in the supply of petroleum products hence the need to bring the private sector on board.
“The process for the transition should have started in March this year but will only start in June to allow us put modalities in place because the petroleum sector is very sensitive as a cartel can be made to disadvantage the people,” he said.
The minister said Government will continue reviewing the petroleum supply chain in the country to ensure that the sector is competitive and make petroleum products cost reflective.
Mr Mabumba said Government will also prioritise construction of fuel storage facilities in all provinces to ensure consistency in the supply chain.

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