The Ministry of Energy has received financing from the Government of the Republic of Zambia towards the cost of engaging a qualified and experienced Consulting Firm to manage the Uniform Petroleum Pricing Mechanism nationwide commencing December 2024. The Uniform Petroleum Pricing mechanism is self-financing; however, it should be noted that the engagement of a consultant is an additional cost line that will be paid out of the UPP Fund.
The UPP mechanism entails that the cost of transporting fuel to areas furthest from Government depots be met through a cross-subsidization mechanism seeing that the transport cost was the only variable that brought about a fuel cost differential between urban and rural areas. Therefore, under this scheme, Oil Marketing Companies are compensated for the cost of transporting fuel from urban to rural areas in refunds or claims to enable them to sell petroleum products at the price(s) prevailing in urban areas. It is financed by the consumers with proximity to the depots in the form of contributions to the UPP Fund and the intended beneficiaries are consumers in the far-flung areas who receive refunds in the form of claims. Commercial sales such as supplies to the mines, are not part of the UPP Mechanism.