The Effects of Fuel Price Changes on Financial Planning of SMEs in Mtendere Township, Lusaka

This study assessed the effect of fuel price changes on the financial planning of SMEs in Mtendere Township, Lusaka, focusing on operational planning, profit projection, and price planning. The study adopted a quantitative approach and used a purposive sampling technique to select 50 SME owners and managers. Structured questionnaires were used to collect data, which was analyzed using MegaStat Software. The study found that 60.0% of SMEs reported that fuel price changes negatively affected their operational costs, while 28.0% reported a significant negative effect. Regression analysis confirmed a statistically significant relationship between business dependence on fuel and the effect of the price changes on operational costs, F(1,48)=5.70, p=0.0210, with R2 = 0.106 and r = 0.326. Regarding profit projection, the study found that 36.0% of SMEs sometimes revised their profit projections, while 32.0% reported that their six-month profit projections were unreliable and 24.0% considered them very unreliable. A statistical association between frequency of profit projection revisions and perceived reliability was found through a chi-square test (df = 16, X2 = 46.46, P = 0.0001). On price planning, 50.0% indicated that fuel volatility forced them to abandon fixed price planning to a large extent. The association between business activity and abandoning fixed prices was confirmed through a chi-square test with the values of df = 12, X2 = 29.12, and P = 0.0038. The study recommends that SMEs adopt flexible budgeting, scenario-based profit forecasting, contingency reserves, and responsive pricing strategies to strengthen financial resilience against fuel price volatility