MUSHIMBA PROPOSES FUEL PROCUREMENT RESTRUCTURING TO SAVE K8 BILLION
Organized People’s Party (OPP) president Eng. Dr. Brian Mushimba has called on Government to urgently restructure the country’s fuel procurement system, saying the move could save Zambia about K8 billion annually.
Dr. Mushimba said the recent fuel price increase announced by the Energy Regulation Board (ERB) should prompt Government to address fundamental weaknesses in the current fuel supply chain.
He said his party had modelled an alternative procurement system involving a national fuel bulk procurement company, which would purchase fuel directly from international suppliers and utilise TAZAMA and existing storage infrastructure.
“Under this proposed model, with insertion of a possible ‘national fuel bulk procurement company,’ a new fuel supply model for the country would look like this:
(1) International supplier
↓
(2) Zambia bulk procurement entity
↓
(3) TAZAMA / storage infrastructure
↓
(4) National distribution network
↓
(5) Retail stations/Consumer.”
Dr. Mushimba said the proposed model would eliminate several intermediary margins and reduce fuel costs.
“We must face this reality that fuel prices, if not contained, will keep rising,” he stated.
He said the model could save about K8 billion annually, equivalent to approximately US$420 million.
“If we want cheaper fuel, Government must restructure how we procure fuel,” he stressed.
“As a matter of urgency, we ask Government to relook at the structure of our fuel procurement,” adding that, “this proposed model saves Zambia K8 billion per year.”