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


The Oil Marketing Companies Association of Zambia (OMCAZ) says it is unfair for government to allegedly award Agro-Fuel Company Limited sole right to import processed low sulphur diesel through the converted TAZAMA pipeline.

OMCAZ president, Kafula Mubanga, said this decision was unfair to other participants in the market as it went against the principle of fair business competition.

Mubanga in an interview on Friday with journalists noted that Agro-Fuel was only sub-contracted to clean up the pipeline in readiness for operations, a contract that must have already come to an end by now.

He explained that TAZAMA pipeline was supposed to be open to all OMCs to allow for competition unlike the current situation where it was being run by a single-sourced entity.

Read more: Govt cautions oil marketing companies over alleged hoarding of petroleum products

“Government must come clean on this matter and clearly state what the objective is. Why are we keeping Agro Fuel for a longer time and not open the pipeline for competition purposes and if the objective is to reduce the cost of transporting products, why is Government not having a decision over Agro Fuel?” he questioned.

Mubanga stated that the operation of the pipeline by a single-sourced entity had made it difficult to push for a reduction in the pump price of fuel as there were limited stakeholders in the operations of the pipeline.

“The pipeline was supposed to be open to allow competition, this kind of uncompetitive kind of practice should come to an end in the industry because then it kills the objective of us having a pipeline if only one particular company will be able to push in products and regulate it, it means we cannot have competition and we cannot push the price of fuel down,” he said.

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