Zambia should expedite the construction of the pipeline for refined fuel

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Zambia Energy Forum Chairperson Mr. Johnstone Chikwanda speaking during a panel discussion at the 'Invest in Zambia Business Forum' at Sandton Convention Centre in Johannesburg
Zambia Energy Forum Chairperson Mr. Johnstone Chikwanda speaking during a panel discussion at the ‘Invest in Zambia Business Forum’ at Sandton Convention Centre in Johannesburg

Energy Forum Zambia has called on government to expedite the construction of the pipeline for refined fuel as it will significantly reduce pressure on the roads in the country.

In a statement, EFZ Chairperson Johnstone Chikwanda said the proposed fuel pipe will significantly bring to an end the perennial conflict between local and foreign transporters whereby local transporters feel that foreign transporters are taking their jobs.

He said though there is the issue of Transporters losing jobs the move to construct the pipeline should be commended.

Below is the statement as issued by Mr Chikwanda.

The Energy Forum Zambia hereby calls upon the Zambian government to expedite the construction of a pipeline for refined fuel. The volume of fuel being imported into Zambia and that which is transiting through to the Democratic Republic of Congo (DRC) has increased exponentially and will continue to do so due to increased economic activities. The pressure on the roads is significant and the potential for road carnage will continue to increase.

The proposed fuel pipe will significantly bring to an end the perennial conflict between local and foreign transporters whereby local transporters feel that foreign transporters are taking their jobs.While the forum believes in local empowerment, we also feel that local transporters ought to appreciate the gravity of challenges which include legal implications involved in stopping a company from using a transporter of choice.

Although the sector is a regulated sector, the Energy Regulation Board (ERB) cannot promulgate regulations which are not supported by the law of land. Hence the need for patience on the part of local transporters,” he said.

If local transporters can be feeling the impact when government is the dominant importing party, what about after government dis-engagement when Oil Marketing Companies will be importing for themselves? Are we going to stop someone who has imported his fuel from offloading directly at a client of his choice or at his own filling station? Some OMCs have negotiated long term transport contracts based on overall volume to be moved in the region. Is it legal to stop them from using their own preferred transporters?

As a forum, we sympathize with local fuel transporters that is why in our recent submission to government we highlighted how local fuel transporters could be impacted negatively after government dis-engagement from fuel importation and how the impact could be reduced. But we know that the country has also got scores of transporters of dry and wet cargo such as acid and chemicals who also feel the impact of foreign transporters who transport this cargo to Zambia and offload at locations determined by the buyer in line with the CIF terms and conditions. Yet we do not hear of them threatening strikes including refusing to load mealie meal and fertilizer. If acid and liquid chemicals can be imported and offloaded directly at the mines why should it be made illegal for Total or Puma or any fuel supplier to import and offload Low Sulphur Diesel directly at their depots which are located at the mines?

Thus, there is need to balance concerns well within the wider prism of other transporters and stakeholders including line ministries such as Energy, Commerce and Transport. If an OMC has imported fuel from Tanzania, are we saying that he has to travel all the way and offload at a depot in Ndola or Lusaka and then give business to local transporters to take the fuel back to Muchinga or Northern Province where the OMC has a filling station? If an OMC has a fuel depot at a mine, is it wrong to import and deliver fuel directly to the depot located at a mine? Is it lawful for our local fuel transporters to enter Tanzania, Mozambique and South Africa for the purpose of uplifting fuel meant for Zambia?

If our local fuel transporters have lost business, how much business have they lost over the years? Fuel consumption in Zambia has doubled over the past 10 years. Therefore, we expect increased business for the local fuel transport industry as a whole over the last 10 years. If this is not the case, is it because of pockets of foreign transporters or is it because of proliferation of new local transporters and fleet expansion among old transporters? According to the 2016 ERB list of licensed tankers, Zambia has 587 fuel tankers which is a sharp increase from the number of tankers 10 years ago.

If local transporters are experiencing dwindling revenue, there are many variables to examine including transport tariffs. There are so many questions which need good answers. All these questions need to be confronted because you cannot conquer what you cannot confront.
And the Energy Forum Zambia has revealed that it will soon hire a consultant to undertake a study into the variables that could be affecting revenue for local fuel transporters and whether there is a significant impact on them from foreign fuel transporters who bring fuel to Zambia’s depots where it is uplifted by local transporters to various destinations.

As a forum we are of the view that a new pipeline to transport refined fuel from outside Zambia will bring to an end the petrifying conflict between local and foreign fuel transporters which in the past has contributed to tanker drivers going on strike thereby causing the industry and the nation significant economic loss. Because of Zambia’s unique location, we also encourage companies such as TAZARA and Zambia Railways (ZR) to diversify and invest in local fuel transportation business by road and not just by rail and compete with private local fuel transporters. TAZARA and ZR are further encouraged to find ways of being part of the pipeline project.

In conclusion, we wish to encourage various stakeholders in the sector to take advantage of the ongoing consultations being spearheaded by the Minister of Energy and submit well researched proposals which will contribute to finding a suitable balanced model which will inform, guide and mentor fuel procurement after government dis-engagement from the process. The fact that government has decided to engage various stakeholders means that government cares and understands what is at stake.

ISSUED BY JOHNSTONE CHIKWANDA
ENERGY FORUM ZAMBIA CHAIRPERSON

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4 COMMENTS

  1. I can’t read this very long article, what time will I find then to prepare for my Masters in Economics and Finance Exams,,,,no matter what is said Zambia will never develop, Africa is a cursed continent

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  2. What WE NEED IS UPGRADING INDENI and the EXISTING PIPELINE or CONSTRUCTING A NEW REFINERY with new PIPELINE TO BRING IN REAL CRUDE to REFINE IN ZAMBIA and EXPORT FINISHED PRODUCTS TO SOME NEIGHBORING COUNTRIES for example Southern DRC (Katanga),Malawi and some parts Zimbabwe and Tanzania. NOT this PIECE MEAL PROPOSAL just to address the issue fuel transporters,we start thinking about building a pipeline? WE NEED A MORE HOLISTIC SOLUTION THAT WILL CREATE MORE JOBS AND ASSURE MORE ENERGY SECURITY! FROM a new refinery, we CAN ESTABLISH MORE PETROLEUM BASED INDUSTRIES TO ADD VALUE and CREATE JOBS!

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