State clarifies oil delivery contracts

THE Government contracts with some foreign oil transporters are still in effect and cannot be terminated abruptly to incorporate additional local transporters in the fuel delivery chain.
Mines, Energy and Water Development Permanent Secretary, Charity Mwansa has said the Government through the Energy Regulation Board (ERB) cannot arbitrarily terminate the existing contracts with foreign transport as that will be breach of contracts.
But Petroleum Transporters Association of Zambia President Roberto Sabbadin says local fuel transporters have grounded their fleet to push the ERB to engage more Zambians in the fuel delivery chain.
Ms Mwansa said yesterday that Government will begin to incorporate local fuel suppliers in the delivery chain as and when a contract with a foreign transporter expired as doing so hastily would result in huge costs for the State arising from breach of contractual obligations.
She directed the ERB to compile a list of existing local fuel transporters and assess their capacity to deliver before they can be engaged in the distribution chain.
“The minister of Energy had given a directive that the ERB should promote local people in the fuel delivery chain and as and when current contracts with foreign transporters expire, more locals will be engaged,” she said.
Ms Mwansa said the Government had engaged various suppliers on the prospect of awarding at least 20 per cent of each contract for the delivery of petroleum to local suppliers.
She said Dalbit Petroleum Limited of Kenya had since agreed to these terms while Government would continue to dialogue with other suppliers so that they too could accommodate more Zambian distributors.

“Government has stated that at least 20 per cent of the fuel supply contract from the port of Dar-es-Salaam to Indeni should be given to Zambians while no foreign transporter will be allowed to pick fuel from Indeni and distribute to filling stations locally,” she said.
But Mr Sabbadin said in a separate interview that it was unfair for ERB to continue engaging foreign transporters when local people had the capacity to deliver in the fuel distribution chain.
He alleged that ERB had engaged South African and Tanzanian companies to distribute fuel locally at the expense of local companies.
“The main issue is that ERB has continued to engage foreign transporters whenZambians have the capacity to deliver the same commodity.
“ERB has also been paying a lower delivery rate for local transporters and a better one for foreign companies,” he said.
Mr Sabbadin said the ERB was paying local transporters 0.48 Ngwee per tonne of fuel delivered per kilometre while foreign transporters were receiving 0.68 Ngwee per tonne per kilometre of fuel delivered.
He said 480 petroleum tanker drivers representing local fuel distributers had grounded their fleet as of Monday this week in protest against the ERB for engaging foreign fuel distributors.
Mr Sabbadin said the truckers would only resume operations when the impasse was resolved.

Times of Zambia