The Oil Marketing Companies Association of Zambia – OMCAZ has raised concerns about the government’s decision to continue single sourcing diesel suppliers through the pipeline thereby expressing concern about the possible lack of transparency and competition in the process.
OMCAZ has since challenged investigative wings to seriously take keen interest and look into the matter stating that if left unchecked, the situation has the capacity to disturb the industry’s supply chain in the long run.
Government terminated Agro Fuel Investment Limited’s contract which had been single-sourced to import processed low-Sulphur diesel via the pipeline and has again single-sourced Devon Oil Zambia Limited to supply the product.
Speaking in an exclusive interview with the Zambian Business Times – ZBT, OMCAZ President Dr Kafula Mubanga urged the government to reconsider and explore other options that would allow for greater competition and transparency.
He said, “Our continuous appeal to the Government is that it should rescind its decision from single-sourcing suppliers as that is an injury to the norms of the competition on the market.”
“We appreciate that the Government took time to heed our appeal regarding the cancellation of agro fuel which was single sourced and now our appeal is that let the Government float the tenders so that there is transparency in the manner in which awards of such major tenders are issued as opposed to single sourcing which triggers a bit of resistance to other OMCs who feel they can offer better prices than what Devon and Agro fuel had offered.”
“In a normal market practice, you cannot have a single source approach as there are other companies that could have offered competitive prices and it is very clear that in single sourcing there are speculations of corruption around the process especially in the industry where competitors are quite a lot.” He said.
Dr Mubanga said the Association expects that the investigative wings would be interested in such matters to ensure that they reinforce the applicable law and ensure that they protect the market.
“When we have the silence about such kinds of norms it is a danger to the industry we expect that investigative wings would investigate how the two companies were single-sourced, why where there a bleach in terms of tendering process and procedures.”
So our appeal is basically that the Government should restrain itself from single-sourcing diesel towards an open tender process to enhance transparency and efficiency as far as issuing of tenders is concerned.
He said the narrative by the government to single source is wrong and our appeal is that the Government should desist from single sourcing because it raises questions about the whole process of rewarding of contracts.
The OMCAZ has since urged the government to reconsider and explore other options that would allow for greater competition and transparency suggesting that a single supplier model could result in potential supply chain disruptions and higher costs for consumers.
