Zambia’s sole oil refinery is working from reserves after running out of fuel stocks amid growing energy demand, an industry official told Dow Jones Newswires Monday.
The Indeni refinery has formally notified the Ministry of Energy and Water Development about the problem, an official at Zambia’s Energy Regulatory Board said.
“The refinery run out of crude oil stocks on Friday,” he said by telephone from Zambia, adding that for now, reserves are being used to produce fuel.
Last week the Zambian government ordered all oil marketing companies, or OMCs, to import enough finished fuel stocks to avert a crisis. The official said the next consignment of stock is expected July 22.
Growing fuel demand, spurred by increased copper mining operations, has depleted reserves at the refinery and since last month Zambia has been facing a diesel shortage.
The refinery has been ensuring copper mines receive enough diesel by rationing supply to OMCs. However, to ease the countrywide shortage the government directed the refinery to end diesel rationing, which has depleted its stocks.
Last year, the Zambian government ordered the country’s 17 OMCs to keep strategic reserves to avoid a repeat of the 2005 crisis which paralyzed operations at Mopani and Konkola Copper Mines, the country’s leading copper producers. But so far very few OMCs have complied with the directive.
With the hydropower sector also overstretched, Zambia’s energy crisis is expected by industry officials to worsen.
Production of copper could be hit if the situation is protracted, with the country’s copper output expected to hit 800,000 metric tons next year compared with 500,000 tons in 2006.
Indeni Refinery, which the Zambian government jointly owns it with Total SA TOT, is set to close for a month of maintenance work in September.