THIS column has time and again featured articles I have written of the country’s petroleum sector primarily because of the role this important commodity plays in our economy.
Two months ago, it was the increase in fuel prices and how the move would have a negative effect on the economy.
At that time, the Energy Regulation Board (ERB) increased pump prices for petrol to K8.74 per litre from K7.60, diesel to K7.59 per litre from K6.59 per litre and kerosene K5.40 per litre from K4.69.
Recently, ERB announced a K1 increase to fuel prices and this time, petrol has been hiked to K9.87 a litre, diesel to K8.59 per litre and kerosene, which went up by 72 ngwee is now fetching K6.12 a litre.
My focus this week is not the negative impact of the fuel increase because the topic has been exhausted and now awaits intervention from policy-makers to achieve the desired difference.
It has come to the attention of interested parties that Indeni Petroleum Refinery in Ndola has of lately processed substandard crude oil forcing the plant to temporarily shut down its operations.
Zambia imports crude oil from unnamed sources in the Middle East and the commodity is processed into a finished product at Indeni in Ndola which feeds Tazama for onward distribution by oil marketing companies.
The challenge surrounding the importation of crude oil has been the use of agents or as commonly referred to ‘middle men’.
These people, at will, control what brand of fuel goes to Indeni for refining and at what cost.
ERB can has no other excuse save for the depreciation of the Kwacha against the United States Dollar when increasing the prices of fuel because raw materials are procured in the foreign currency.
The delay in addressing the aspect of importing fuel has left the country in a predicament and unless this is dealt with efficiently, we have a problem but without a solution.
Indeni in its current state, according to Energy Minister Christopher Yaluma, can only operate at half capacity hence one can only imagine how much damage substandard fuel is causing top the refinery.
For the last four decades, Zambia has relied on Indeni as the sole petroleum and Government has put some shares on offer for an equity partner to share the burden of its current performance.
If this process could be fast tracked, then some of the challenges at the refinery could be a thing of the past.
The current fuel supply chain must be revisited and overhauled soon as possible to arrest the inconsistencies causing the Government to pay huge sums of money when importing the commodity.
Ultimately, it is the tax payer that will foot the bill to get Indeni up and running after the minor glitch caused by the processed crude containing foreign matter.
There were some investigations instituted in 2012 regarding the fuel supply chain but to date the public is yet to be availed with the results of the inquiry.
It is only prudent that the authorities move quickly on the matter so that the country can handle its own oil procurement processes with the benefits going to the ordinary Zambian.
Some companies have been engaged in exploring for oil and gas for nearly a year now but we are yet to hear of the results.
If indeed the country has traces of oil, authorities have to move fast and rope in people to invest in oil wells so that the country can start producing its own fuel.
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