FUEL prices and those of other petroleum products will soon drop by as much as 30 per cent following a US$3.3 billion investment in a new oil pipeline and refinery to be erected in Ndola.

This comes after the signing of an agreement between a Zambian firm, Sub-Saharan Gemstone Exchange Industrial Park (SGE) of Ndola and Maysen & Borowski Group of Australia to construct the refinery and pipeline.

Zambia’s second refinery and the new pipeline running from Dar-es-Salaam to Ndola will see increased fuel production by an additional five million litres of fuel per day which it is projected would lead to a reduction of fuel prices in Zambia by 30 per cent. The new refinery will be using natural crude in its production process.

SGE and Maysen & Borowski Group of Australia signed the agreement in Ndola yesterday in the presence of Commerce, Trade and Industry Minister, Robert Sichinga.

Maysen & Borowski Group Manager for Finance and Corporate Services, Mathew Borowski who signed on behalf of his company, said the idea to invest in Zambia was mooted in October last year when Vice-President, Guy Scott and Mr Sichinga were in Australia for the Commonwealth Heads of State Summit.

The Group comprises five companies, dealing in corporate risk solutions and investment.

It operates in Australia, United States of America, Canada and Africa and is headquartered in Perth, Australia. The company’s establishment in Zambia is expected complement Indeni Petroleum Refinery output.

Mr Borowski said the project would create 13,000 jobs during construction and 5,000 jobs when the entire project, which will include a dry-port, warehouse and houses, was completed.

He said although Zambia was landlocked it was strategically located for investment and trade. Zambia has easy access to the Common Market for Eastern and Southern Africa (Comesa).

“The project will increase fuel production by five times and we also want to open up the Congo DR market,” he said.

He said the success of the petroleum refinery project would also create opportunities for other companies.

Mr Borowski said his company was also involved in tourism and would look at constructing mini hydro-power stations.

Zambia’s national consumption for diesel is pegged at more than one million litres while petrol stands at about 750 litres pay day.

SGE chairperson, Phesto Musonda said the refinery would be built at a cost of US$1.7 billion while the pipeline from Tanzania to Ndola would gobble up US $1.6 billion.

Mr Musonda said Zambia consumed 1.5 million litres of fuel per day and that the new refinery would be producing five million litres per day.

He said SGE was happy to partner with Maysen & Borowski Group because the petroleum refinery would come with a number of benefits besides the creation of thousands of jobs.

And Mr Sichinga said that the Government was mobilising investors and encouraging Public Private Partnerships (PPP).

He said he was impressed with the rate at which the plans for the refinery and pipeline project had progressed because it was only in October last year when the idea was discussed and already experts had assessed its viability.

The minister said foreign investors alone could not develop the country and that this was the reason the Government was encouraging Zambians to engage in partnerships.

He said that the liberalisation of the economy in the 1990’s cost Zambians a lot but that the country would re-look at what went wrong to create an impetus for economic growth.

A feasibility study would immediately start before construction commences at the former Ndola Copper Refinery in the industrial park of the industrial area.

[Times of Zambia]

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70 COMMENTS

    • #Absolutely: I was like what has the government discovered within the pricing mechanism? Well, soon could actually mean 3 – 5 years time. Good for the government. Now Sichinga, Electricity please!! medium term 3 years; quickly bane.

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  1. There is no time given, by completion, many factors would have changed, and it is highly unlikely that the price of fuel would drop. why produce 5m litres when the consuption is only 1.5m litres per day? does that make any economical sense?

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  2. Generally speaking it is pretty difficult to get the all clear for a US$3.3Billion investment in six months…let alone raising the requisite funding. It appears that all what has been signed here is an MOU that will facilitate further due diligence e.g. feasibility studies etc. There is also a whole load of statutory approvals that would be required from both Tanzania and Zambia before financial closure would be reached for such a project. It is an interesting idea though it is surprising that GRZ has made no capital committment to it. I suspect the project’s risk profile would become better if that were they case especially in view of the nationalisation of Zanaco. Time wise I would not expect the project to be commissioned before 2018…

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  3. projects like this take years to complete. It is a great project but saying the price will drop by 30% as if it will happen tomorrow is kak. And again the PF promised oil from Angola.

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  4. Typical Africans. Ifintu nibwangu mentallity. Can`t wait for a project which takes anything more than one day Jesus!

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  5. Good project. But get such results like 30% reduction on fuel is NOT attainable in short term but after the completion which I think is not any time soon.We need more of such benefitial projects n zed. bravo

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  6. stupid bloggers…patience pays…why are you in hurry? just wait and see..this is a very good move. in concur with Italian bunga bunga…this ifintu nibwangu mentality will kill you….why do yo want speeedy projects….thats why mukwatila ama g’onga.

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  7. How soon is soon. Stop playing to the gallery. This is not a one month or one year project. Soon is not the right word

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  8. 30 % reduction????????????? Are you using Alladin and his wonderful lamp which has Gene that waves a magic wand? Be realistic

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  9. Does not make sense, is the fuel price in Zambian dictated by demand and supply? I do not thinks so..Lusaka times is mad on this one.Some journalist needs basic understanding of economics man..this is misleading…..

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  10. #2. That’s why there are tools available to make projections. You should also understand that building a plant with excess capacity will provide enough leeway for growth in the market. Zambia is a developing country afterall

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  11. this same reduction in fuel just benefits thoz who own vehicles coz these stingy pipo with busineses dnt reduce any commodities..it doesnt trickle down to the needy….

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  12. IS IT ANGOLA OR TANZANIA . WHERE IS THE DIRECTION . OR MAY BE THIS IS FOR THE VP WHO CANT ACT WHILE THE ANGOLA ONE IS FOR THE PREDO .
    ONE HAND DOESN’T KNOW ABOUT THE OTHER.
    THE GVT IS NOT PUTING MONEY ON ITS MOUTH.

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  13. Dar route is more feasible.. Luanda is too far out and most of the country is still being demined which will take another 10 plus years. The road, rail, power and related infrastructure will need to be developed over very long stretch.. Its easier to run additional crude oil lines along side existing TAZAMA lines. Im sure the chambers housing the lines have sufficient provision for additional lines. These are the things GRZ should be working on and should even pump in a good $900m towards the project in cash + related TAZAMA infrastructure and secure 50% ownership. My take

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  14. @Analyst, you are very silly with no brains. Try to understand what people are talking about first then you can talk. Don’t just yap. Its a good project but it hasn’t even started yet. How long will it take to build a fully functioning refinery, furthermore,  a pipeline of about 2,000 km. Analyst, My foot

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    • *****….BY THE TIME THE PROJECT WILL BE FINISHED YOU WILL BE NO MORE…SOME OF US WE ARE PATIENT ENOUGH TO SEE GREAT ACHIEVEMETS

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  15. This will be reversed by the next government. There will be a commission of enquiry in 2017 and the project will be cancelled.

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  16. #2, what does feasibility study mean to you? After the feasibility study has been completed that’s when such details exactly when the project will start and approximately how long the project will take to to accomplish. Sometimes lets just be quiet instead of marketing our ignorance.

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  17. Wrong head line. This is a futuristic project which as you know with fall of the kwacha won’t real reduce prices by 30% at the current rate. Please use right head lines.

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  18. The project will put indeni out of business. So why not then partner with indeni and refurbish their existing structures (pipe line & refinery)

    Will the new refinery treat sour oil as well ? if not then its pointless

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  19. 30 PERCENT WILL BE A VERY BIG DROP IN PRICE. LET US WAIT AND SEE BECAUSE WE HAVE HEARD SO MANY PROMISES THAT ARE NOT YET FULFILLED. 

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  20. How do they know that the price of oil will fall by 30%? How can you predict that fart into the future? Would it not be more prudent to say that the proposed pipeline if completed might bring the price of fuel down? What about the the supposed oil deposits in various parts of Zambia? Would it not make more sense to see how much oil we may be able to produce locally before spending colossal amounts of borrowed money on such a project?

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  21. Let me see: the finance manager, Mr Boorowski, also owns the firm, Maysen & Borowski? Right?  And this company does not specialise in oil terminals and refineries at all because it also has tourism interests.  They are also so small they only want to do mini-hydropower stations!  This sounds like a get-rick-quick scheme by somebody, most likely the Australians.  They will get their fees (based on the billions of dollars project cost) for carrying out the feasibility study and that will be the end.  Forget all those pumped up cost estimates and benefits.  They will not happen.  This project is another pie in the sky like KK’s oil from grass.

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  22. Why raise people’s expectations unecessarily? The title of this story is wrong coz the price of fuel should not be the subject but the investment itself and its value to the country.

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  23. Something fishy about this, it is all too good to be true (5,000 long-term jobs is not realistic, modern refineries producing only 5m litres a day do not need that many workers) and you know what they say about something which is too good to be true. Are Maysen & Borowski Group the next RP Capital? How does a $3bn deal get done in less than six months? Which Government officials will be getting kick-backs? What about the workers at Ndeni? Ndeni produces 1.5m litres a day, this new and more efficient plant means their jobs are gone. Lets start the Commission of Inquiry now to save time…

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  24. When will Pipo learn to say thank God it has happened or it’s in the process of happenin.this ryt here if u don’t realise is development,think about how a 30% decrease in the long term will affect zambia,it’s a positive move.utatasha patunono,stop acting like economists and consume,that’s wat u are good @

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  25. The Sub Saharan Gemstone Exchange which Phesto heads and is located on the same premises has miserably failed to take off. Now he wants to convince us that this US$3.3 billion project will take off?

    This is one serious dreamer!!

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  26. Stop sensationalizing your titles! You talk as if it’s something that we will see tomorrow! This is a project that will take years and nothing has started yet. Thanks for the news but be a bit more professional.

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  27. Agree this is a long term project if at all it will materialize. An MOU does not imply the project is consumated. Who knows what the oil prices will be in the next 6 months let alone 36 months?Zambian consumption is around 1.0million tons per year NOT liters by the way. 5 million liters is what BP or PUMA sells per week. What about the world debt crisis and commodity prices are we going to have enough yuan to buy all the oil seeing we now spend $800 million per year and an additional refinery means doubling our forex outflows to oil…or is this fo DRC?Will they pay for feedstock as well? If this refinery will use crude what will happen to the by-products? Is the refinery equiped for chemical hydrocracking into the various chemical byproducts? I wish the project promoters good luck…

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  28. Maysen & Borowski sponsored the meet the vice president event in perth so they knew that a contruct like this would be given to them. I smell a rat. Corruption is stincking here.

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  29. A bit too good to be true. If it takes off, Indeni will be out of business. Indeni’s fuel will be more expensive because it processes comingled feedstock which is more expensive than raw crude oil mentioned here.

    Is the govt ready for a life without Indeni?

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  30. Another Phesto’s big project! Probably something similar to shopping mall along Kitwe-Chingola road? Do you know that he is blacklisted by FQM/KCM/Mopani etc.
    Maysen & Borowski are just consultants and peanut-size company for such deal. They have absolutely no experience in construction/production/oil marketing. Question is who will provide $3.3 billion?No one of coursr! This is another RP deal, PF’s this time. They will pump-out significant sum of money from Govt. for various feasibility studies/market research etc (and pay back most of it as kick-back) and dissapear. Another sad African story.

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  31. Indeni doesn’t process crude oil but co-mingled petroleum products. The feed stock is a mixture of various fuels. As of now, there are plans to make the necessary modifications to the 40chakuti year old plant for it to process crude from places like Angola. A larger percentage of the pump price of fuel comprises taxes and other levies, whose use we have never appreciated because they have been abused to a larger extent. One such levy is the fuel levy introduced by Nawakwi meant for rehabilitation of roads then. Todate govt collects huge amounts of money through this levy but can’t explain were they are spent. All road done in this country are either donor funded through grants, or from borrowed money. There are many players in the retail oil marketing sector but all uplift their stocks

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  32. I can see a lot of ignorance in some comments. The oil refinery has been part of the plan in the Industrial Park and all necessary approvals from government & related Institutions have been obtained in the past diligently. The new oil refinery is not here to put Indeni out of business but to supplement it & further Indeni is not & has never been capable of purifying pure crude oil which the new oil refinery will be capable to do. Another point is that this project is Private sector funded and govt’s only role is to facilitate and help where possible (It has no shares or selling anything).

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  33. dreamers dreaming dreams as usual, b4 Ndola’s Zambezi Portland Cement (ZPC) in 2006, dreamers were alleging that cement would drop to as low as K25,000.00 once ZPC start operating. This dream is yet to be fulfilled…cheap politics! believe and continue believing to be hopeful and throw out anxiety. unit cost of producing cement is still still above the dreamers’ dreams. 30% drop should indeed be a great saving!

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  34. Lusaka Times, please take to edit your articles befoer you publish them. Look at this sentence that I have copied from your article above:”Zambia’s national consumption for diesel is pegged at more than one million litres while petrol stands at about 750 litres pay day”.

    IT IS NOT “PAY” day but per day. Further 750 litres per day is NOT correct. Awe mwe!!

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  35. This is hot air-period. Get it from me. It will not happen. Just like the copperbelt city project. where is it now??

    Gud headlines but no results. just talking, talking, talking like uncle Bob-has a string a failure. No record of success.

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  36. Mrs.Anonymous,be a little bit rational in your submissions .And when you are think try to think beyond your nose,otherwise you are people who only think about yourself in the home and forget about your children and wife

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  37. Cont.. their stocks from Indeni. Where is the competition here? It’s not market forces determining the price of fuel here. The procurement process is not transparent. Fuel deals are usually sealed at Plot 1! This deal must be commended as it will be the 1st private sector driven petroleum project in Zambia. The projected 30% reduction in the fuel price may be attributed to the fact that the plant will process crude unlike co-mingled oil. One can speculate a further reduction as the proprietors will definitely not source crude through middle men and they will not be driven by the amount of commssions or kick-backs received, as the case seems to be now. By the way, what happened to Kabimba’s commission of inquiry?

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  38. Why are people in a hurry,nobody has said the price will drop tomorrow,why conclude on things you do not know.The project is a welcome development,this is what working govt should be doing

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  39. Where is Winter Kabimba’s COI on fuel?These shits after chewing manner under maliciously disolving ERBhave found out that there is nothing wrong with fuel procurement.In shame,they decide to keep quite knowing how forgetful Zambians are.You will account for all the monies that you are wasting on useless comissions.

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  40. Another PF conman talking about 90 days promise. There is no sane investor who can bring $3.3 billion to a stinking country like Zambia where fast speaking danderheads like Bob Sichinga support Nationalisation. Wake up zambia, you are being given a dose to sleep

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  41. #41 stop displaying your ignorance, the Copperbelt city project has been delayed because Mopani copper mine put an injunction against it but they almost lost the case and had to withdraw it from court for fear of embarrassment. The project will soon commence. And for your record of success go to Manda Hill and ask them who single sourced the money for its upgraded status. Yes good headlines, which other way would you want someone to announce good news?please be analytical..
    #44 bravo, you are amongst the informed.

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  42. Appalling reporting again, please state the commencement of the project and completion date, who is funding the project and if its the taxpayer how does this equate to 30% reduction in fuel as someone has to pay for it. LT about time you researched your own stories.  

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  43. How many cement plants have been opened in Zambia? Has the price of cement come down?
    From an economic point of view it does not make sense to build an oil refinery inland. Indeni is the only inland refinery in the world hence the cost of fuel being high in Zambia. You need to pipe finished products which are high value not crude.
    Thats why Angola makes sense as finished product will be pumped to Ndola or Solwezi. Another dream project which will never take off

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  44. Just to add a bit of my economic ignorance. Over capacity of any production facility (plus Indeni) is expensive and so will the product. Unless of course you do it in stages to match with demand growth, or you have found a market for the excess capacity. On the other hand, I do not think these businessmen are coming to invest in order to help Zambian motorists to keep more money in their pockets, the business dictum is to maximise profits, especially when one has to recover such a huge investment. When you spend so much money the payback period is long, you will maximise your profits in a short period so that you reduce risks like change of government, economic policy, or leaders, nationalisation, even fear of COI etc. Economists, how am I doing so far?

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    • Action will be there to help anyone out that has quentioss regarding the Corona SDK! as most of our board members have not played around with Cornoa SDK yet, this would be a great time to go and get help!

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  45. By the way, who among those guys said that prices of fuel will be reduced by 30%? Of course we know that Bob Sichinga of the K3 Trillion fake notes fame was in attendance no less, can only be him and not those sober businessmen. Especially that the acting president Alex Chikwanda was not there to guide Bob, eishh!

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  46. By the way Doctre, when is the next COI? Kind of missing them you know, who knows I could be the next Chairperson of one.

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  47. Serious projects don’t rush to the press before all the funding or deliverables are looked at, goals and objectives are scrutinized,  business as usual (or operations) parameters are defined, preconceived constraints are epitomized and synergies in both downstream and upstream scopes are elaborated. An MoU might have been signed but a lot of work still remains, ever heard of white elephants? Without taking care of house-keeping details, this might end to be one of them. Good luck to the proprietors … we will you God speed.

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  48. #50 Ba Biggie..thanks for the question, we are not building another pipeline from Tanzania. What will be done is to upgrade Tazama pipeline and extend the current pipeline by about 500m into the new oil refinery. The new oil refinery will be adjacent to Indeni.

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  49. why are chaps even talking about angola those guys produce sweet crude so until stop using diesel trucks , generators and heavy equipment like on the mines forgot about it. that’s why we can’t refine it here. now if these guys we’re talking about bio-oils invest then it would be interesting by they’ll be relaying a lot on exporting products to the drc 

    this is defiantly a pipe dream excuse the pun

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  50. Very interesting – What’s the model? Is it a PPP? Hardly predict prices to drop by 30%
    It would make sense if the other part of the world is switching their dependence on hydrocarbons!!
    There is a kind of a Red herring in the info / facts…. haha 

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  51. Zambians, for once be positive about the fuel pipeline thing. Even if its a long plan, in no time that same long plan shall be short and eventually a fulfillment. Think about it and for once be positive.

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  52. Zambians, for once be positive about the fuel pipeline thing. Even if its a long term plan, in no time that same long term plan shall be short and eventually be a fulfillment. Think about it and for once be positive.

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