The Oil Marketing Companies Association of Zambia – OMCAZ has questioned the Energy Regulation Board on why diesel transportation cost is still the same as petrol despite the use of the pipeline to transport diesel which is believed to be much cheaper than the road.
According to the ERB Price build-up for September 2023, obtained by the Zambian Business Times – ZBT, revealed that diesel transportation cost is still the same as petrol despite use of the pipeline.
The UNIFORM PUMP PRICE BUILD-UP for SEPTEMBER 2023 PRICE ADJUSTMENT obtained from the ERB indicated that the Transportation cost for both petrol and diesel is still ZMW/M3 520.
OMCAZ President Dr. Kafula Mubanga has however questioned why the status quo has not changed when the essence of transporting the commodity via the pipeline was to reduce the transportation cost which could in turn further reduce the oil pump price.
“Those are some of the issues that must be raised as far as proper price range structures are concerned. We do not expect to have the same price as petrol because we now have the pipeline whose costs must be lower than the road transportation.” Remarked Mubanga.
Mubanga noted that the essence of the convention of the pipeline was to reduce the cost of transport which should in turn push the cost of pump price product to much more lowly.
“ERB must clearly explain why the position is still as such so we are appealing to ERB to explain to the nation why the status quo has not changed when we have the reflective costs on their costings has not changed when there is the pipeline which more cheaper.”
“We did mention that it would be very important that there is an SI to compel all importers that use the pipeline to avoid leeway of such costings aspects where others would say we still bring in the product using the road. So when you increase competition on the pipeline, everybody will migrate to the pipeline but also it should be political way and this can come out through an SI to compel all OMCs to use the pipeline to bring in the product as a way in which the government intends to reduce the cost of pump prices.”
Dr Mubanga also urged government to put up a compelling instruments so that only petrol should be transported via the road while diesel should strictly use the pipeline.
