Business Editor's Choice

Agents pushing up oil prices – Sichinga

NANCY MWAPE, Livingstone
A SENIOR government official says the use of middlemen in the buying of crude oil is because Government cannot directly get from Saudi Arabia, hence making the price of petroleum costly.
Minister of Commerce, Trade and Industry Robert Sichinga said there is need for Zambia to procure crude oil at its lowest price to enable the country become competitive and lower the cost of doing business.
Mr Sichinga said it is unfortunate that Zambia is unable to procure crude oil from Saudi Arabia but use middlemen who buy on behalf of the country.
In an interview, Mr Sichinga said the manner in which fuel is procured has an influence on the price of the commodity in the country.
“As Government, we normally sign agreements ahead, meaning you cannot go back and say the price of fuel on the international market has dropped. Can you reduce your commodity?
“They would simply say, we already signed an agreement and the supply is paid for. You cannot do anything when the price drops on the international market,” he said.
Mr Sichinga said Government is committed to reduce the cost of running businesses so that it becomes affordable to majority Zambians and to stabilise the value of the Kwacha against the United States dollar.
“Our mandate is to lower the operational costs for businesses. Zambia does not produce oil and we are dependent on procuring from outside. We procure a commingled feedstock of crude that is refined at Indeni Oil Refinery in Ndola,” he said.
He also said the country loses a lot of oil through leakages along the pipeline as it is transported from the Tanzanian port city of Dar es Salaam to Ndola.
“The fuel that is lost through leakages is a cost in itself that has to be recovered from consumers. If [there was] a refinery that could refine pure crude oil, it would be easy for the country because we could have by-products like bitumen which would help reduce costs,” he said.



Facebook Feed

Ad1