Zambia suspends fuel taxes to cushion economy amid global oil price surge

The Zambian government has announced a three-month suspension of key fuel taxes, a move aimed at shielding citizens and businesses from rising global oil prices.

The decision follows a special Cabinet meeting chaired by President Hakainde Hichilema, which focused on mitigating the economic impact of surging fuel costs, a spillover from the ongoing conflict involving the US, Israel, and Iran that has led to the closure of the Strait of Hormuz.

In a press statement issued on March 31, 2026, Chief Government Spokesperson Cornelius Mweetwa said the cabinet had approved the zero-rating of Value Added Tax (VAT) and the suspension of excise duty on petrol and diesel imports, effective April 1.

Cabinet also declared the current fuel supply situation an emergency, citing mounting pressure from global markets.

According to the government, the intervention is a short‑term response to escalating international crude oil prices, largely driven by tensions in the Middle East that have disrupted global supply chains.

"Cabinet noted with serious concern the continued conflict in the Middle East, which has led to disruption in global oil supply chains, resulting in increased international fuel prices," Mweetwa stated.

The government warned that without these measures, pump prices for April 2026 would have risen significantly, worsening the cost of living for households and increasing operational costs for businesses.

Zambia, like many fuel-importing nations, has been affected by the global supply disruptions, prompting urgent action to stabilize the domestic market.

Mweetwa said the temporary tax relief is designed to cushion households, businesses, and key productive sectors from the adverse effects of rising fuel costs.

"The public is encouraged to remain calm as the government continues to monitor the situation closely," he said, adding that authorities are prepared to take further action if necessary to protect the economy and citizens' welfare.

The tax measures will remain in place for three months, after which the government is expected to review the situation based on global oil market trends.