PUMA oil Zambian unit risks having its operating license revoked after the company was accused of deliberately failing to stock enough fuel at most of its retail service stations, leading to creating of what has been described as an artificial shortage.
Energy Minister Mathews Nkhuwa during his fact finding tour of the Southern Province to check on fuel stock levels expressed his concerns questioning why Puma was the only oil marketing company whose retail service stations had no fuel when others had managed to re-stock.
The Energy Minister said he is disappointed with PUMA pointing out that almost all the filling station he had visited across the province had managed to get back to normal in terms of having enough stocks of both Petrol and Diesel at the various filling stations.
Nkhuwa said despite Puma having 70 years experience in the Zambian energy sector, its disappointing that the company is failing to order fuel in a timely manner so as to cushion consumers against possible shortages.
“Puma management seems not know what they are doing, the situation is disappointing since we need them to come through especially during this time when we are experiencing some level of fuel shortage as a country,” he said.
He said he was impressed with the fuel stock levels at most filling station except for puma. The minister noted that most filling stations had enough stocks to last up to six days. “Oil marketing companies have reserves for filling stations, while the country has reserves that should be drawn from in times of need”, he said.
Fuel shortages at some service stations started building up and was caused by oil marketing companies not ordering fuel due to high landing costs which was eroding their margins.
“So upon realizing that, government did consultations and afterwards we removed exercise duty on both diesel and petrol and zero rated the Value Added Tax – VAT so that the end user prices would not be adjusted upwards. This is why the current pump prices remained at the same price,” Nkuwa emphasized.
The Energy Minister has since assured the nation that fuel price hike was unlikely at the moment. “We would have increased the price of fuel, but we realize that if we increase the price of fuel, everything else will sky rocket in terms of pricing”, he said.
Nkhuwa however cautioned that the government had limited to no control over the two major factors that led to fuel increase. He cited the two factors as the Kwacha to US dollar rate and the international oil prices.
“So when international oil price goes up, it becomes very difficult to hold the prices down, if you look at the current situation, the Kwacha depreciated by about 51% and a barrel of crude oil has gone up from about US$40 the last time we increased, to now about US$53. These are the factors that put pressure on landed cost of fuel,” he said.
When ZBT reached out to Puma, regarding the threat of the oil marketing company losing its Zambian operation license, Puma Zambia Managing Director Pinchi Simukwai stated that he would issue a statement later.
