By Derrick Silimina

As transport fares and logistics costs are expected to rise by 10 – 20%, a Lusaka based economist says the latest fuel price revision reflects a strong cost-push shock within Zambia’s price system.

The Energy Regulations Board’s announcement indicates that fuel prices have been adjusted upward: petrol increased by about 2.0%, diesel by 28.1%, and kerosene by 53.2%. These substantial hikes, especially in diesel and kerosene, reflect significant cost increases that are likely to contribute to higher transportation and logistics expenses across Zambia.

Economist Kelvin Chisanga said while petrol increase is modest, the sharp surge in diesel and kerosene has widespread economic implications as such adjustments are indicative of a broader cost-push inflationary pressure affecting the country’s price system.

“Diesel is always considered a basic factor and the backbone of transport, agriculture and industrial production, so a 28.1% increase will directly transmit higher costs across supply chains,” Chisanga said.

He predicted that transport fares and logistics costs are expected to rise by 10–20%, directly affecting food prices and overall inflation, adding that Kerosene’s 53.2% jump hits low-income households hardest, reducing disposable income and increasing the cost of daily essentials.

Chisanga stressed that for businesses, operating expenses will rise, tightening profit margins adding that higher fuel import costs will also pressure the Kwacha, raising the risk of further price adjustments and inflationary pressures.

He further outlined that on the policy front, the adjustment highlights the need for energy diversification, fuel-efficiency improvements, targeted support for vulnerable households, and strategic price-stabilisation measures.

“In essence, this fuel price adjustment is more than a sectoral issue; it is a broad economic shock affecting households, businesses and macroeconomic stability, underscoring the urgency for coordinated policy and structural reforms.”

Meanwhile, the government’s approval of two significant tax relief measures—suspension of excise duty and zero-rating of VAT on petrol and diesel for three months (April – June) aims to mitigate the impact of the fuel price hikes on the economy.

Economic analysts suggest that without these reliefs, the prices could have surpassed K33 for petrol and nearly K35 for diesel noting that these interventions are said to have “absorbed” most of the global shocks affecting petrol prices as Global Oil Hits $114/bbl, although diesel and kerosene still experienced double-digit percentage increases due to their sharp rise in the international market.