Friday, October 05, 2007

Sata questions purpose of SRF

Sata questions purpose of SRF
By Webster Malido and Joan Chirwa
Friday October 05, 2007 [04:00]

OPPOSITION Patriotic Front president Michael Sata has questioned the purpose of the Strategic Reserve Fund (SRF) since the country has continued to experience fuel shortages. But Energy Regulation Board (ERB) public relations officer Kwali Mfuni said the SRF has actually helped greatly in maintaining prices of fuel on the local market through subsidies.

Meanwhile, Lusaka has also been hit by a shortage of petrol, barely a week after the Copperbelt Province started experiencing critical shortfalls of the commodity.

Sata alleged that there was failure by the ERB to properly account for the use of the SRF.

“What has happened to that money (SRF)?” Sata wondered, “because all pump stations are dry when they have been collecting that money. You have a fully-fledged ERB board. Do they only regulate fuel increases? Where is the Strategic Fuel Reserve? What have they done to that money? Fuel here in Zambia is still very expensive. Here we are, dry, nothing!”

Sata said there was need to thoroughly investigate the use of the SRF. But Ministry of Energy and Water Development Permanent Secretary Buleti Nsemukila said the government had always been transparent in publicising the use of resources under the SRF.

Nsemukila said records regarding the use of the SRF were available and dismissed assertions that the government had not been accounting for resources collected from OMCs for the country’s fuel reserves.

“It is not correct to say government has not been accounting for money collected under the SRF,” Nsemukila said. “The Ministry of Energy and Water Development even gave a breakdown of the money spent under SRF to the parliamentary committee on energy. It is important to appreciate the fact that the SRF has most of the times been used to cushion prices of fuel since the fund was established for that.”

And Mfuni said without subsidies from the SRF, fuel prices in the country would have been much higher than the current rate.

“The money that Oil Marketing Companies (OMCs) are remitting to the SRF is being used to cushion increases in prices of petroleum products so that a change in international prices of fuel is not felt so much here in Zambia,” Mfuni said.

“Sometimes, the ERB has not increased prices of fuel for some months because it has been using part of the SRF to stabilise prices of fuel in the country.”
Mfuni said diesel was one commodity that had always been highly subsidised through the SRF due to its importance on economic development.

“Prices of diesel on so many occasions have been retained because it is a key fuel for economic development,” Mfuni said. “We are talking about huge quantities of petroleum products here that are being subsidised by the SRF although sometimes this fund is limited, so prices of fuel go up.”

The Strategic Reserve Fund was established in 2005 for the country’s strategic fuel reserves and to help stabilise fuel prices.

And a number of service stations in Lusaka have run out of petrol, causing several motorists to queue up for the commodity.

By Wednesday evening, BP filling station in Longacres area only had stocks of premium to last until Wednesday night while one of the Total filling stations on Great East Road had run out of petrol.

However, Caltex filling station in Longacres on Wednesday received 29,000 litres of unleaded petrol and 25,000 litres of diesel and it was expecting another 14,000 to 21,000 litres of petrol yesterday.

Government has indicated that the shortage of petrol was a short term situation, saying supply would get back to normal once Indeni Oil Refinery in Ndola resumes production soon.

Indeni last week received a total of 60,000 litres of crude oil which has not yet been pumped, causing a lot of panic among motorists.

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