Zambia has extended its suspension of excise duty and value-added tax on petrol and diesel for another 90 days, maintaining a relief measure aimed at easing pressure on consumers and businesses facing elevated fuel costs.
The Information and Media Ministry said the extension takes effect from July 1 and will remain in force until September 30.
The policy, first introduced in April following approval at the end of March, temporarily removes key taxes on imported fuel in an effort to stabilise pump prices in the landlocked southern African country, which relies heavily on imported petroleum products.
Zambia is particularly exposed to fluctuations in global oil prices, which directly affect transport costs, food prices and overall inflation due to the economy’s dependence on road transport for goods distribution.
Authorities said the measure is intended to cushion households and businesses from external shocks linked to volatile international energy markets, including supply disruptions and geopolitical tensions affecting oil prices.
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Information and Media Permanent Secretary Thabo Kawana said the government would continue implementing policies designed to reduce the impact of global price movements on domestic consumers while maintaining macroeconomic stability.
The initial suspension was estimated to cost the state about $200 million in lost revenue over three months, underscoring the fiscal trade-off between consumer relief and government income.
Despite the revenue loss, officials argue the policy helps to stabilise inflationary pressures by reducing transport and production costs, which feed into the prices of goods and services across the economy.
Fuel prices remain a sensitive issue in Zambia, where increases often translate quickly into higher food and transport costs, disproportionately affecting low-income households.
The extension comes as many African economies continue to grapple with high energy import bills and currency pressures, prompting governments to adopt a mix of tax relief, subsidies and price controls to shield consumers from global shocks.
Economists say such measures can provide short-term relief but may strain public finances if maintained for extended periods, particularly in countries already facing tight fiscal conditions.
Zambia, a net importer of fuel, has been among the economies most affected by global energy market volatility, which has been driven in recent years by geopolitical tensions and supply chain disruptions.
Authorities say they will continue monitoring global oil price trends before deciding on whether to extend the measure beyond September.
For now, the government says the priority is to maintain price stability and protect households and businesses from further increases in fuel costs.
