The Saudi Arabian government has agreed to supply Zambia with cheaper oil which will reduce domestic fuel prices for the next five years, state broadcaster reported on Monday.

The Saudi Arabian government has offered a 20 million U.S. dollars revolving fund through the Saudi Fund for National Development for the supply of cheaper fuel to Zambia, according to the Zambia National Broadcasting Corporation.

Zambia's Ambassador to Saudi Arabia Ibrahim Mumba said the offer was currently in its final stages and that negotiations could be concluded this week during President Edgar Lungu's two-day state visit to that country.

Saudi Fund and a Zambian bank, Zanaco, are currently in talks to facilitate the transfer of funds so that the supply of cheaper oil to Zambia could commence, he added.

According to him, Saudi Aramco, one of the world's largest oil firms, has already agreed to produce and supply oil to Zambia once logistics are finalized.