Maravi

Fuel shortages

Fuel shortages
By Editor
Friday October 05, 2007 [04:00]

Having experienced one of the worst fuel shortages in the country in September 2005, we thought that enough lessons were learnt in terms of management of the flow and supply of energy resources in the country. We must have been mistaken. Given the public pronouncements that were made by government leaders following the 2005 fuel shortages, we believed that the government had truly realised the importance of having in place an elaborate and reliable fuel supply system.

And we cannot be blamed for having believed so because President Levy Mwanawasa in October 2005, after dropping George Mpombo as energy minister, told the nation that the government would do everything possible to ensure that fuel shortages came to an end.

He went further to appoint a special committee which was headed by then commerce minister Dipak Patel to investigate the possible causes of fuel shortages in the country. If anything, we have not heard of what really came out of that special committee.

We are actually interested to learn more about the actual work that was done by this committee towards the realisation of the goals and objectives that were set out for it.

Furthermore, we still remember that early last when Felix Mutati was still energy minister, he told the nation that the government had partnered with the private sector in starting to work on the country’s fuel reserves. Mutati went on to announce that the government was working on establishing state reserves and that legislation was under way.

Today, we know that there is what is known as the Strategic Reserve Fund (SRF), whose real purpose people are now beginning to question basically because fuel shortages have continued notwithstanding this SRF.

The fuel stability assurances come from political leaders. Even the energy technocrats have made pledges to the effect that fuel supplies would be stabilised. Some of the promises of stability in fuel supply have come from the Energy Regulation Board (ERB).

In February last year, ERB executive director Sylvester Hibajene told the nation that Oil Marketing Companies (OMCs) had been asked to reserve fuel volumes equal to 15 days’ supply based on their respective market share.

We doubt if this is really happening because if that were the case, the country would not be going through another fuel crisis like the one before us now.

We may not be able or competent enough to clearly outline the intricate details of the genesis of the present fuel shortage. However, we can state plainly that what we are going through today is primarily a result of mismanagement by those tasked with the responsibility of managing this sector. And we can say that it starts from the top.

We have stated in the past that the oil sector requires capable leadership because this sector is central, very key, to the smooth functioning of our economy. There is no need to start recounting the well-known spiral effects of fuel shortages on the economy and people’s lives and their ways and means of doing things.

With what we are witnessing, we are tempted to think that the energy sector, like many other sectors, is running on an autopilot basis. We seem to be content with old ways of running this sector without a strategic plan.

What we need to know is that things will not change in the country if our people do not demand that those entrusted with responsibilities deliver in accordance with public expectations.

In the first place, we think that the constant breakdowns at Indeni Petroleum Refinery must be looked at in a different way. In any case, we already know that the refinery is in an obsolete state and the equipment at the plant has for a long time been in desperate need of a complete overhaul.

We do realise the need to keep attending to and repairing equipment at Indeni Oil Refinery because the plant obviously requires regular maintenance and service.

However, we also think that it is not good management and planning to be fixing one problem today when we know very well that another problem will be experienced in another area tomorrow. We are saying this because from the look of things, this is how Indeni has been managed for some time now.

If we are truly serious about finding some kind of lasting solution to fuel supply in the country, and bearing in mind that Indeni is the only crude oil processor, we think that there is need for the government and its partners in Indeni Oil Refinery to seriously invest in the plant. This is if some of the problems that have become an occasional occurrence are to be done away with.

Another area that needs to be tackled is the procurement process. We think that this area has suffered short circuits for a long time and it needs to be streamlined or at least structured in a more realistic manner, perhaps in the manner that the ERB was proposing in terms of involvement of OMCs.

From the present shocks in the fuel sector, it is very clear that the country does not have buffer fuel stocks, yet this need has been there for a long time.

We are not talking about buffer stocks for 20 years - although this would not be a bad idea if feasible - but stocks that would keep the country running for some reasonable period in times when we have problems, for instance, at Indeni.

In the final analysis, what we are saying is that we need a clearly thought-out energy policy for the country so that minor hiccups in the supply chain do not cause shocks to the economy, which highly depends on energy for its smooth functioning.

We do not need to recite the importance of a steady energy supply system to economic development. All we have to do is formulate a clear vision and policy on this significant sector of our economy.

Labels: EDITORIAL, INDENI, OMCs, SRF

posted by MrK @ 3:36 AM