Maravi

Nsemukila explains fuel supply problems

Nsemukila explains fuel supply problems
By Florence Bupe, Fridah Zinyama and Joan Chirwa
Wednesday October 10, 2007 [04:00]

Government has already put in place long-term procurement measures to avert future fuel crises in the country, energy permanent secretary Dr Buleti Nsemukila has disclosed. And the Economic Association of Zambia (EAZ) has said the government has not been very forthcoming in providing information about the fuel crisis in the country.

Meanwhile, the Zambia Business Forum (ZBF) has warned that the current fuel crisis would reverse economic gains made in the past few years if not carefully handled.
In an interview, Dr Nsemukila said the fuel supply problems that Zambia had been experiencing in the past had been due to lack of long term procurement measures.

"Government has already begun working on an international competitive bidding process, and this will ensure that there are long term procurement measures in place," Dr Nsemukila said.

"In the past, the country has frequently been affected by erratic supply of fuel because we lacked competitive bidding. It hasn't really been a problem of foresight."

The country has for the past one week been hit by a critical shortage of fuel, and consumers and other stakeholders have blamed the government for the crisis, saying there was lack of foresight on the situation.

Dr Nsemukila said the government had put in extra efforts to ensure that the ship carrying the feedstock consignment for Indeni Refinery docked on time, but the offloading process was delayed due to a misunderstanding between the supplier and their bank.

"It is sad that while we worked hard as government to make things better, a misunderstanding arose between our supplier and his bank, which led to our success being overshadowed," Dr Nsemukila said. "We managed to have the ship dock by 20th September, five days ahead of the scheduled 25th September."

Dr Nsemukila also said the implementation of the long- term procurement system, which would be effected in January 2008, was expected to bring down fuel prices.
And EAZ president Mwilola Imakando said the government had made a lot of promises about the fuel crisis in the country but had failed to deliver.

"Government has failed to adequately address the problem of fuel and this will negatively impact on the economic progress that the country has attained so far," he said.
Imakando said it was unfortunate that such a situation could be allowed to occur just when the country had returned to single digit inflation.

He said the government should show more commitment to addressing the fuel crisis as it affected all the sectors of the economy in the country.

And Mfula said the erratic supply of the commodity would negatively impact the production process, overall output and the transport sector.

"The ZBF has noted, with great concern, recent developments in the energy sector, particularly the erratic fuel supply currently being experienced countrywide. The Zambia business sector has been recording positive strides in production and the business environment has greatly improved," Mfula said.

He said the developments recorded in the country's economy were now being threatened by the persistent fuel shortage, as production in key industries was being paralysed.

"Output is likely to go down and ultimately affect overall Gross Domestic Product (GDP) for the year 2007. This will also affect public service delivery to the private sector. Last year's single digit end year inflation figure of 8.2 per cent may not be attained if mitigating factors are not put in place," Mfula said.

He also noted the need for the government to establish a long-term SRF that would adequately deal with the supply of fuel in the country.
"Perhaps, the last question to ask is, how long is the fuel crisis going to last and what measures are being put in place to address this scarcity?" asked Mfula.

Labels: BULETI NSEMUKILA, EAZ, FUEL, INDENI

posted by MrK @ 4:25 AM