GOVERNMENT is working on short and long term interventions that will effectively lower fuel pump prices, Mines, Energy and Water Development minister, Christopher Yaluma has said.
Mr Yaluma said there were several factors that contributed to the increases in the pricing structure of petroleum products among them the strengthening of the dollar against the kwacha and transaction fees paid to middlemen in the procurement of petroleum feedstock.
“However, a multi-fold approach of initiatives is being undertaken by the central bank through forex injections and construction of strategic storage facilities. So when all interventions are applied, the price of fuel will certainly stabilize,” he said.
Another avenue being pursued by Government to eliminate ‘unwanted’ middlemen was to sign agreements at Government to Government level.
He said it was also important to appreciate that the petroleum industry was a well controlled sector that had the ability to dictate the direction of an economy.
Strategic storage facilities would be constructed in all provincial centres and other strategically located towns like Mpika and Kapiri Mposhi.
Mr Yaluma said in an interview in Kasama that the Mpika storage depot was actually complete and awaiting commissioning.
“We need to get these facilities across the country to reduce transportation costs,” he said.
On the long term interventions, the minister said indicators showed there was more than a 60 per cent chance that the five firms awarded nine licences between them to prospect for oil would yield positive results.
On the Ndola-based Indeni Oil Refinery, Mr Yaluma said the facility had exhausted its life cycle.
He said the refinery as an asset had exhausted its usefulness and had been kept running for purposes of maintenance.
He said the building of new refinery is however, largely dependent on the result the firms prospecting for oil will produce.
“By next year we should have results because of the improved technology being used,” he added.