Fuel shortage hits Lusaka, L/stone

COMMENT - And when did the private sector step in and create alternatives to the nation one parastatal? I would say that this is another example of market failure. But then the private sector is rarely interested in infrastructure - other than using it.

Fuel shortage hits Lusaka, L/stone
Written by Nchima Nchito Jr in Lusaka and Edwin Mbulo in Livingstone
Sunday, October 11, 2009 4:01:29 AM

LUSAKA and Livingstone have been hit by a severe shortage of fuel, leaving most motorists stranded as filling stations have ran out of stock. But energy permanent secretary Peter Mumba has said the current fuel shortage has been caused by a technical failure at Indeni Oil Refinery.

A spot check by The Post in Lusaka found many service stations without petrol and motorists were being turned away. Most of the service stations only had stocks of diesel.

Engen Filling Station along Makishi Road was one of the few with petrol in stock and had a long queue of motorists with priority being given to account holders only.

Indications are that stocks of petrol ran out on Friday evening with new stock expected by yesterday evening or today.

And officials at the country’s two leading oil marketing companies, Total Zambia and BP Zambia, could not comment on the matter as their mobile phones went unanswered.

And in Livingstone, only Engen and Caltex service stations had both diesel and petrol.

BP, Vuma and Fallsway service stations had by yesterday run out of fuel.

And during a press briefing in Lusaka yesterday, Mumba said the technical failure at Indeni had drastically reduced petrol production capacity at the plant.

“…The catalyst, which is the component at the refinery that is responsible for production of petrol, has weakened such that production of petrol has reduced. This is the reason why the supply of petrol on the market has equally reduced,” he said.

Mumba said while the current production should have met a larger portion of the demand, the situation had been compounded by uncertainty of future supplies by not only the consumers but fuel suppliers as well.

“A 90000 metric tonne shipment of petroleum feedstock was received on 23rd September 2009. This shipment will last the country until around 20th November 2009. Another shipment has been ordered for consumption in late November and December,” Mumba said. “The refinery is due for maintenance closedown in mid October 2009 to work among other components, the catalyst which is responsible for production of petrol.

“In order to have stocks during the shutdown, 15 million litres of petrol and 25 million litres of diesel are being imported. Loading of these products in Dar es salaam will begin on Wednesday 14th October 2009 with the view to have the fuel start arriving in Ndola 5 days after.”

Mumba said TAZAMA was by yesterday expected to issue 1.5 million litres of diesel and 700,000 litres of petrol.

“Under normal circumstances, these levels of supply should sustain the market, but we have seen consumption increase from 450,000 litres per day of petrol in the [recent] past to currently 700,00 litres per day. For diesel, it has moved from 1.2 million liters per day to 1.6 million litres per day,” he said.

Mumba further said Oil Marketing Companies (OMC) had been instructed by the Minister of Energy to release their strategic reserves onto the market.

By law, OMC are required to have a 15-day reserve stock of fuel in case of shortages on the market.