Govt cancels oil contract

GOVERNMENT has with immediate effect cancelled Gunvor Oil Group contract, replacing it with the Independent Petroleum Group (IPG) from Kuwait.

Energy permanent secretary Emeldah Chola confirmed the development and has assured Zambians that the nation still has enough fuel stock levels for consumption.

Gunvor supplied contaminated crude oil to Zambia containing high levels of organic chlorides for the second time within a period of one year.

Last week, it was revealed by the Ministry of Energy that Gunvor supplied a cargo that docked on January 10, 2016, containing high levels of organic chlorides, similar to the cargo that the ministry received in June 2015 which saw Government losing over US$10 million.

In 2015, Gunvor was summoned by the Ministry of Energy and warned that should it supply contaminated crude feedstock again Government would revoke the contract.

And now that it has supplied contaminated crude oil contrary to what was resolved last year, procurement Committee in the Ministry of Energy convened a meeting

to review Gunvor’s contract and decided to terminate it.

Gen Emelda Chola confirmed the development to the  Daily Nation in a press statement.

Gen Chola said after the procurement process had been concluded it was resolved that Independent Petroleum Group replaces Gunvor Oil Group.

Gen Chola said this was not the first Zambia was dealing with Independent Petroleum Group.

Gen Chola said the replacement was expected in the third week of February, 2016.

She said the problem of contamination had therefore been rectified.

Gen Chola appealed to all consumers to go about their normal business without any anxiety or panic as the country had enough fuel.

And Gen Chola yesterday announced in her statement the Ndola Fuel Terminal, Lusaka, Mpika and Solwezi fuel depots had fuel.

She said as of February 1, 2016 the available national stock levels in the Government depots was 36 million litres for diesel (16days of national consumption) and 5.8 million litres for petrol (Five days of national consumption).

Gen Chola said the figures given on available fuel did not include the stock that the Oil Marketing Companies had in their storage facilities.

“In order to address the low levels of petrol, imports have been increased. So far 6 million litres is in the transit while 6 million litres of petrol was being loaded on urgent basis,” Gen Chola said.

Gen Chola said a total amount of 26 million litres which amounted to 20 days of stock for petrol would be needed.

The Independent Petroleum Group (IPG) is a group of Companies headquartered in Kuwait with worldwide operations in the trading and marketing of crude oil, petroleum products, LPG, petrochemicals and fertilizers.

A unique niche player, IPG focuses its activities on special, high-return markets in the Red Sea, East Africa and the Indian Sub-Continent.