Maravi

Govt faces blame for Indeni closure

Govt faces blame for Indeni closure
By Joan Chirwa
Tuesday July 15, 2008 [04:00]

INADEQUATE planning on the part of government has caused the shortage of crude oil at Indeni Oil Refinery, reliable sources have disclosed. And Oil Marketing Companies have started stocking petroleum products from various international sources following government's directive as Indeni remains shut for the next two weeks.

The sources said government's failure to plan adequately had caused the shortage of crude oil and the subsequent shutdown of the country's only oil refinery as daily consumption for fuel has risen over the past few months.

Indeni Oil Refinery has been shut for two weeks owing to the shortage of crude feedstock. In view of the situation, the government directed OMCs to import 21,000 tonnes of fuel into the country to mitigate the commodity's shortage on the local market.

"Actually, the problem came in because government had not foreseen growth in demand for fuel. Government thought it would start utilising the crude oil which was imported in May by June 30 but because of increasing demand, the stock was used way before the stipulated date," the source said. "Government planned to have the next consignment of 90,000 tonnes of crude oil only around July 17 and July 24, but since Indeni has run out of the feedstock before the next consignment is brought in, the refinery had to be shut. This is all because there was lack of proper planning."

Daily consumption for diesel has risen to 1.6 million litres from the previous 1.0 million litres while that of petrol has gone up to 1.0 million litres from 750,000 litres. The increase in demand for fuel has been necessitated by rising economic activities in the country, especially in the mining sector, as well as enhanced use of diesel-powered generators in view of the country's power deficit.
And most OMCs have raised their import levels for petroleum products to build sufficient commodity stocks for the local market.

BP Zambia managing director Cremion Mapfumba said the company was doing everything possible to import enough fuel stocks to cover for a month.
"We will import in excess of 35 million litres of fuel and the stocks have already started arriving. We have been importing but this time, we have just increased on the imported products," Mapfumba said. "We are doing what we can because our job is to sell fuel and if we don't plan adequately, we will be out of business."

And Kobil Zambia Limited marketing and operations manager Francis Mwangi said the company had made a commitment to bring in 3.5 million litres of fuel from various sources.

"We are looking at having enough stock during this time when Indeni will be closed," Mwangi said. "Already, 700,000 litres of fuel has been imported from various sources and the other consignments will continue to come."

Energy permanent secretary Peter Mumba assured the nation of enough fuel stocks held by OMCs, but could not give details of how much fuel was being held at TAZAMA.

Labels: INDENI

posted by MrK @ 3:46 AM