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LUSAKA, June 26 (Reuters) – Zambia slashed its fuel import duties on Thursday in a bid to cushion copper mines and other consumers from the impact of rising global oil prices, Finance Minister Ng’andu Magande said. 

Magande, who also announced a hike in pump prices of finished petroleum products, said the cut back in taxes had allowed the government to avoid a possible abnormal rise in pump prices that could have choked industrial output. 

He said customs duty on diesel had been reduced by half to 15 percent while import duty for petrol would come down to 45 percent from 60 percent. 

A 15 percent customs duty on kerosene was scrapped. 

“The total revenue loss as a result of these reductions in tax rates for the remainder of the year will be 127 billion (Zambian) kwacha,” Magande told journalists. 

Diesel pump prices were raised to 7,237 Zambian kwacha from 6,400 kwacha per litre while petrol prices were increased to 8,355 kwacha from 7,616 kwacha. 

The finance minister said the increases could have been higher without the reduction in the fuel import duty. 

“It is evident from the (new) price levels … that the measure taken by the government of reducing taxes has a positive impact on pump prices,” he said. 

Magande said the country’s bill for crude oil imports had risen by 66 percent to $118 million for a 90,000 tonnes shipment of crude oil due to arrive in July from $71.5 million for a similar shipment of crude oil in December 2007. 

Zambia uses huge amounts of diesel to run its vast copper mines, the country’s economic lifeblood. Exchange rate: $1=3,300 (Reporting By Shapi Shacinda; editing by James Jukwey)

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