Analyzing the Effects of Fuel Price Fluctuations on Cost of Living in Lusaka’s High Density Areas: A Case Study of Mandevu Constituency

This study examined the effects of fuel price fluctuations on household economic well-being in Mandevu Constituency, one of Lusaka’s most densely populated (467, 744) and economically diverse areas (ZamStats, 2022). Employing a descriptive cross-sectional case study design, data were collected from 200 stratified randomly selected households to assess the influence of fuel price changes on household savings, food consumption, investment, disposable income, and coping strategies. Statistical analysis involved descriptive summaries and Chi-square hypothesis tests to establish significant associations between fuel price adjustments and household economic outcomes.The results demonstrated significant adverse effects across all variables. Rising fuel prices had a statistically significant negative impact on household savings (χ² = 9.94, p = 0.0016), confirming that households struggled to maintain regular saving habits as fuel costs increased. Similarly, fuel price fluctuations were found to have a highly significant relationship with the reduction in food consumption (χ² = 48.22, p ≈ 0.00000001), showing that households reduced both the frequency and diversity of their meals in response to rising costs. The analysis further established an extremely significant association between fuel price increases and a decline in household investment capacity (χ² = 22.63, p = 0.000002), indicating that rising energy costs forced households to redirect income from long-term investments to immediate consumption needs. Moreover, the results confirmed a highly significant negative relationship between fuel price fluctuations and disposable income (χ² = 21.37, p = 0.00000382), underscoring that escalating fuel prices directly erode household purchasing power and financial flexibility.

Qualitative insights complemented these findings, revealing that 46% of respondents perceived a very high impact of fuel price fluctuations on their cost of living, with most recommending government measures such as reducing fuel taxes (51%), introducing targeted subsidies (42%), and stabilizing fuel prices (34%). In coping with rising costs, households reported strategies such as strict budgeting and expense reduction (44%), participation in group savings schemes (32%), and seeking supplementary income sources (25%). However, only 46% considered community-based coping strategies effective, indicating limited collective resilience mechanisms.In conclusion, the study confirmed all four hypotheses, establishing that fuel price fluctuations significantly undermined household savings, food security, investment activity, and disposable income. The evidence highlighted the need for comprehensive policy interventions focused on fuel price stabilization, social protection enhancement, and income diversification to strengthen economic resilience in Zambia’s high-density urban areas.This paper also recommends the following; Income Diversification: Support micro-credits, training, and digital tools; Social Protection: Expand cash transfers, nutrition, and community support as well as Fuel Price Stabilization: Implement price controls or targeted subsidies.