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Oil marketers welcome govt’s suspension of Agro Fuel contract, insist on competitive bids


Government’s decision to suspend a contract awarded to Agro Fuel Investment Limited to import three consignments of low sulphur diesel at a contract sum of U$210 million has been received with excitement by the Oil Marketing Companies Association of Zambia (OMCAZ).

The association is also happy that while Agro Fuel Investment Limited is a local company, the government had awarded another local oil company, Devon Oil Zambia Limited, to use the converted TAZAMA Pipeline on a cheaper rate.

They have also appealed to the government to consider floating a tender to other players for fair competition as opposed to single-sourcing.

OMCAZ president, Kafula Mubanga, said his association was happy that government had listened to their appeal by suspending the contract and awarding it to another local oil company, Devon Oil Zambia.

Read more: Oil marketing companies fume at alleged award of sole right to import diesel to a single firm

He, however, requested government to float a tender so that more local companies could compete instead of single-sourcing as such kind of procurement processes were offensive to the principles of fairness and competitiveness.

In an interview with Journalists on Sunday following the suspension of the Agro Fuel Investment contract, Mubanga said OMCAZ did not want to see foreign oil companies taking control of Zambia’s gasoil stations and its Pipeline, TAZARA, because indigenous Zambian players had the capacity to manage the Pipeline.

He said foreign oil companies were often in the habit of externalising foreign exchange which had been the major contributing factor to the depreciation of the country’s local currency.

“We do not want one company to be controlling the TAZAMA Pipeline. We want empowerment to OMCs as a sector. Let there be a tender, let government give all local oil companies a chance to prove themselves by giving out slots.”

“Foreign multinational oil companies cannot be controlling our filing stations and our Pipeline. We do not want to see any multinational oil company getting preferences from government to monopolise the sector and if that is going to happen, we are going to protest,” Mubanga said.

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