So why aren’t fuel prices in Zambia exploding?
A World on Edge: Oil Markets in March 2026
Oil prices are surging globally.
The Iran conflict is escalating.
Markets are volatile.
So why aren’t fuel prices in Zambia exploding?
March 2026 has been dominated by uncertainty in global oil markets. The ongoing Iran conflict has pushed energy markets into a volatile phase, with Brent crude rising above $100 per barrel amid fears of supply disruptions. Concerns around key routes like the Strait of Hormuz have only amplified this tension, reinforcing expectations of sustained price pressure.
What makes this moment particularly unpredictable is the role of political signalling. Statements and actions from U.S. President Donald Trump have repeatedly moved markets within hours. Announcements hinting at escalation have driven oil prices upward, while sudden reversals or delays have triggered sharp declines. This is not a typical commodity cycle—it is a politically driven market where expectations shift rapidly, sometimes ahead of real supply changes.
In such an environment, the natural conclusion is clear: fuel prices in Zambia should be rising sharply.
The Intuition vs The Data
The logic behind this expectation is straightforward. Zambia imports fuel, fuel is priced in US dollars, and global oil prices are rising. Under normal assumptions, this should translate directly into higher pump prices.
However, when we move beyond intuition and examine the data, the picture changes.
Using multiple predictive models—including machine learning approaches and a SARIMAX time-series framework—the results consistently point to a much more moderate outcome. Petrol prices are projected to move from approximately ZMW 26.61 per litre to around ZMW 27.00 per litre.
This is not a spike. It is a controlled, incremental adjustment.
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The Real Transmission Mechanism
To understand this outcome, it is necessary to look at how global oil prices actually translate into local fuel prices in Zambia.
Fuel imports are denominated in US dollars, which means the exchange rate plays a central role in determining the final price. As of March 2026, the Zambian Kwacha has remained relatively stable, hovering around 19.40 to the dollar.
This stability acts as a buffer.
Historical data reinforces this point. The correlation between USD/ZMW and petrol prices is approximately 0.93, indicating a very strong relationship. In practical terms, this means that movements in the exchange rate have a more immediate and significant impact on fuel prices than changes in crude oil alone.
As a result, even though Brent crude has risen sharply, the absence of currency depreciation has limited the extent to which this shock is transmitted into domestic fuel prices.
Why the Spike Won’t Happen
The current situation highlights a structural reality that is often overlooked. Global oil prices do not translate directly into pump prices. Instead, they pass through a system shaped by exchange rates, procurement cycles, and pricing mechanisms.
In Zambia’s case, this system introduces both a lag and a dampening effect. Oil price increases are absorbed, at least partially, unless reinforced by currency weakness. This explains why the recent geopolitical shock has not resulted in the kind of rapid price escalation many expected.
The models capture this dynamic clearly. They are not ignoring global volatility; they are reflecting how that volatility is filtered through local economic conditions.
A Data-Backed Outlook
The conclusion from the analysis is both simple and important. Despite one of the most volatile global oil environments in recent years, Zambia’s fuel prices are likely to increase only modestly in the short term.
A move toward approximately ZMW 27 per litre reflects the balance between elevated global oil prices and stable exchange rate conditions.
Final Thought
The lesson from this moment goes beyond fuel prices. It is a reminder that global shocks do not operate in isolation. Their impact depends on how they are transmitted through domestic economic structures.
In Zambia, that structure is clear. The exchange rate is the key variable.
As long as the Kwacha remains stable, fuel prices will adjust gradually—even when global markets are anything but stable.
© 2026 Kampamba Shula