A ZBT investigation has so far only found a 2017 world bank report to have been the only available basis used by Energy Minister Peter Kapala to shut down Indeni. A search for a more recent and independent report has so far drawn a blank with sources saying the decision was based on an outdated world bank report which may have not taken into consideration the supply security and sensitivities of fuel supply which are in the long term interests of the majority of Zambian citizens.
Chikwanda said the task force needs to assess whether the closure of the 40-year-old Indeni Petroleum Refinery will lead to reduced fuel pump prices and if so, to what extent. He said the task force should also assess the impact of these reforms on stakeholders especially the Petroleum Transporters who may lose combined business up to 50% and some of them have active loans with different financial institutions.
The former RIA Chairman told ZBT that task force should also assess and recommend Zambia’s long-term strategy with regard to strategic fuel reserves. He added that if the outcome is favorable, the task force must recommend exit plans and Management of Change (MoC) to manage the transition.
Chikwanda noted that the overall government intention of trying to reduce the inefficiencies in the petroleum subsector through reforms is a welcome development. He said there is also need to assess the viability of reverting the 53 years old 1,710 km Tazama pipeline from transporting crude oil to transporting refined fuel if this has not yet been done in the recent past.
He said there are a lot of technical and commercial questions which need to be answered including assuring the security detail and cost which will be required over the stretch of this infrastructure and the remaining useful life of the 53 year old pipeline. Other consideration is that there is need to also assess if the current transportation tariff of $55 per ton being charged by Tazama is cost reflective
Chikwanda said the task force can conclude its work in less than 3 months and it must also review other studies which have been done in the past and update the findings as well as look at the Petroleum Management Bill which has not yet gone to Parliament. He said government must consider disengaging from participating in fuel procurement as this is where costly inefficiencies come from as well and this has been presented to Parliament many times.
The new government has been advised to take well calculated and informed decisions on strategic assets of Zambia such as fuel supply and logistics. Fuel is at the core of everyday life and business with lessons on why Indeni was set up in the first place readily available for the current generation of leaders.
