Oil Companies importing Cheap Fuel Furious as ERB suspends their Oil importation licences

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Energy Regulations Board (ERB) offices

ZAMBIAN companies importing cheap fuel are furious with the Energy Regulation Board (ERB) for suspending their importation licences to compel them to start purchasing expensive fuel from Indeni in Ndola.

“Why should we be forced to buy oil from Indeni at K13 a litre when we can buy the same at K9,” they asked.

It is illegal, they said for ERB to stop companies from ferrying cheaper fuel from Sasol in South Africa which they said would land in Zambia for less than K9 per litre compared to the K13 they would now be paying from Indeni.

The companies argued that suspending the importation of cheaper fuel from South Africa and forcing them to buy the commodity coming from Tanzania which was more expensive did not make any sense.

They questioned ERB’s logic behind contracting three middlemen which were mainly owned by foreigners to import expensive foreign oil while overlooking Zambian companies which had better balance sheets and were capable of supplying the commodity to the end-users cheaply.

“Why employ middle men leaving out major oil marketing corporations which have a better balance sheet and more facilities on the ground including petrol stations around the country, they have asked.

The Zambian companies complained said ERB already had their Letters of Credit by the time the suspension was being effected and demanded to know what would happen because the suspension notice had not explained on that.

They said ERB was aware that Zambian companies involved in the importation of oil business had prior arrangements and that they were now being forced to buy the commodity from Tanzania which was fetching at K13 while Sasol offering the same at around K8.

“As if that is not enough, we have three middlemen in the importation of fuel. The shareholding of two of these companies is dominated by foreigners while one of them is not even registered with the Patents and Companies Registration Agency (PACRA), yet we have Zambian companies with the same financial muscle being overlooked,” one of the sources complained.

The companies said ERB should allow them to clear the fuel stocks which they had purchased before the suspension was effected.

In a notice by ERB to OMCs signed by executive director Langiwe Lungu, the board suspended importation of petroleum products except for Low Sulphur Gas Oil (LSGO) imported for mining companies and Jet-A-1.

However, OMCs intending to import LSGO would still have to acquire prior written consent from ERB which would only be granted upon satisfactory proof of confirmed orders.

“We wish to advise the suspension of Chapter 3 of your licence (the importation consent) effective January 17, 2017 as the said activity is no longer necessary in public interest. The suspension shall remain in force for a period of six (6) months or until earlier lifted.

“Further, we wish to advise that this suspension will not apply to Low Sulphur Gas Oil (LSGO) imported for mining companies (the mineCos) and other specialised users, and Jet-A-1.

“However, the importation of LSGO shall require prior written consent from the ERB. The consent shall be granted upon satisfactory proof in form of a schedule of confirmed orders,” read the notice in part.

Below is ERB Statement

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24 COMMENTS

    • These are lies!!!
      It makes no sense for them to claim it is k13 at Indeni when it is less than k13 a filling stations

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    • @2 Nigga.. if you follow the flow of the article, you would see that fuel is even SUPPOSED TO BE CHEAPER ST INDENI but is MORE EXPENSIVE due to the GREED and SELFISHNESS of our leaders! The fuel traders have explained that fuel at INDENI has 3 MIDDLE MEN, MOST OF THEM FOREIGNERS WHO ARE JUST RIPPING US OFF!! WHY ALL THESE MIDDLE MEN and then you want to FORCE THE HIGH COST ON ZAMBIAN CITIZENS in the name of “Keeping INDENI open?”

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  1. This is a government that has no interest in its people. If it cared, then cheaper fuel would be welcomed. They talk about empowering local people but keep giving contracts to foreigners. They are very double-tongued.

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  2. GREED,GREED,GREED and SELFISHNESS ALL THE TIME! Why collaborate with foreigners to ripoff fellow citizens like that??Why FORCE expensive fuel on ZAMBIANS just Bcoz SOME ONE WANTS to make a CUT with his foreign Business Associates!

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  3. LT this cader journalism from chawama of the lowest grade…..where is the comment from ERB ?

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  4. And why havent the same Zambians who have been importing cheap fuel not forced ERB to reduce the price of pump fuel

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  5. We need to ask ourselves critically what role ERB is playing. I know someone will say –ERB’s role is regulatory. Really? And regulating what? So far ERB’s so called regulatory role appears to be hurting consumers than protecting them. If indeed market forces can strike a more favorable price, like it’s being claimed in this article, we should demand that ERB is scrapped as it is just increasing the number of middle men in the supply chain.

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  6. Some of these so called regulatory bodies are just increasing the cost of doing business and in turn passing on the indirect taxes to the consumer. At one point we have the energy minister lauding the OMCs and at another we have the ERB fighting the OMCs. What sounds clear is we can do better with OMCs than with both ERB and indeni unless the two have some serious restructuring measures instituted. Government must have been aware of the crippling effect allowing OMCs to import and market oil products would have on indeni before making the decision and so must face it without favour

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  7. ERB is anti-national development by its proven immoral and uneconomic practices. No sane nation goes out of its way to empower foreigners the way the current regime does! It is purely corrupt and uninterested in the wel being of our national economy, and making the national economy competitive via manageable energy costs!

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  8. Zedians, Zedians easy please its not bad for govt to reverse anything once they realise they are about to make a mistake. If Indeni closes and OMCs decides to stop importing fuel for one reason or the other what are you going to do?

    Better govt finds an equity partner for Indeni and OMCs will import when allowed to do so as stated by ERB. OMCs may import cheap fuel but they are separate legal entities who have no obligation to meet the countries fuel demand and can stop importing any time they feel like. Its wise to keep Indeni with more expensive fuel than to close the refinery and run out of fuel when OMCs decides to stop importing due to various reasons e.g ERB refuses to increase petroleum prices or they run out of capital. think bros and Sisters.

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    • You are the one that needs a rethink.

      Businesses are in business to make money. Why should OMC stop selling cheap fuel if Indeni closes???

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  9. Fuel prices were initially ruined by Rupiah Banda who has continued to rule by remote control, there was a petrol station retailing Petrol at K6.80 when Banda said fuel prices should be uniform country wide and raised prices to K8.40. Is that not madness? Why should fuel prices be uniform in Nakonde and Chililabombwe when transport costs from Tanzania to Nakonde is cheap?

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  10. I dont get it, why is the fuel transported by the pipe line more expensive than the fuel transported by road.
    Something does not add up.
    Cry the beloved Zambia we are taken for a fool again!!!!

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  11. in the frist place y have 3 middle man what for i at one time offired them fuel at cost which was 6 kwacha and no middle man EBR refused and this was done theought a shaki but some one poket were not being lined the same went to kenya and now they r getting fuel cheaper than us

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