Make fuel cheaper

 

… Revert to Southern route

By Nation Reporter

ZAMBIA should consider reverting to the old system of sourcing petroleum products through the southern route so as to make use of the railway system which is cheaper and more reliable.

Former deputy minister of Energy Charles Zulu said oil marketing companies (OMCs) should consider using the railways to ferry fuel into the country because it is more cost-effective than road transport.

Zambia currently procures the bulk of her refined products by road via Dar es Salaam and this has been blamed, together with the use of middlemen, for the escalating costs of the pump price in the country. Before UDI in the then Rhodesia, when the country’s fuel stocks were delivered by rail through the southern route, Zambian motorists could buy petrol at K2 per litre.

Speaking to the Daily Nation yesterday, Mr. Zulu said rail transport was best as it would enable oil companies to transport fuel at a reduced cost compared to what they were currently incurring.

“While the OMCs ferrying fuel into the country have preferred to be using road, there is a much cheaper mode of transporting the commodity which is by railway and if they can utilise it, the costs they are incurring will drastically reduce which will make them cost-effective,” Mr. Zulu said.

“However, the decision lies in their hands because Government is now not actively involved in the oil procurement process which has solely been left with the private sector while the State concentrates on formulating policies aimed at smoothening the operations of the sector through its regulatory role.”

Mr Zulu said Government’s policy direction in the oil procurement will help revamp the sub-sector and reduce the price of fuel in the long-run, adding that the decision by Government to allow private players in the sector was long overdue and will address some of the challenges that Government encountered form time to time.

“When you look at the 2017 Budget, you realise that the role of Government is just to regulate the sector as OMCs will take a leading role in the importation and supply of fuel in the country and this is a plus on the part of Government.”

Categorized | Business

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