LUSAKA, April 14 – Zambia will forgo about $100 million in revenue after suspending fuel taxes for three months, as authorities move to shield consumers from rising oil prices linked to the ongoing war in Iran.
Finance Minister Situmbeko Musokotwane disclosed the revenue impact on Monday during meetings in Washington, stating that the measure removes a key source of funding for government services.
The decision comes amid disruptions in global energy markets, with the Strait of Hormuz, a major transit route for oil, liquefied natural gas, and fertilizers, affected by the conflict. The situation has pushed up fuel and input costs across several economies.
In response, countries have introduced measures to manage the price shock. Egypt has reduced fuel allocations for state vehicles, Ethiopia has rolled out subsidies, while South Korea has implemented fuel price caps.
For Zambia, the tax suspension adds pressure to public finances as the government targets a budget deficit of 2.1% of gross domestic product this year. Moody’s Ratings said the deficit could rise to about 4% of GDP.
Authorities also flagged concerns around fuel supply, noting that availability remains uncertain. Any disruption could affect key sectors, including mining, which is central to Zambia’s economy.
The country, Africa’s second-largest copper producer, is aiming to lift output above one million tons this year with officials saying efforts are underway to ensure the sector remains supported despite current market conditions.
The finance ministry is preparing a revised 2026 budget to reflect the broader impact of the energy shock, including revenue losses and potential adjustments to spending.
