Fuel shortage hits Zambia's enterprises

As hundreds of motorists are queuing up at filling stations in Zambia's capital city of Lusaka, manufacturing entrepreneurs in this southeastern African country are forced to slow down their business, which has been badly hit by the oil shortage.

LIVING FROM HAND TO MOUTH

Monday's Zambia Daily Mail reported that the country's biggest mining company, Konkola Copper Mines (KCM), had reduced its production by half due to the ongoing fuel shortage.

KCM Vice President Augustine Seyuba was quoted by the newspaper as saying the company's Nkana mine has seen reduction in finished products from 600 tons to 300 tons per day.

"We are living from hand to mouth in terms of diesel and we have been forced to scale down on our operations," said Seyuba.

Stranded in the similar plight are companies such like Zambia Sugar Company (ZSC) and Zambian Breweries, both of which are heavily dependent on big load of transportation of raw materials or products.

ZSC Corporate Affairs Manager Lovemore Sievu said fuel stocks at the company were running low, noting that the shortage occurred at a critical time when the company was hauling sugar cane from the plantations to the processing plant.

He feared the operations at the company would be grounded to a halt at some point if the shortage would continue.

Zambian Breweries Sales and Marketing Director David Bowa said the situation had affected the distribution of beverages to many parts of the country.

BLACK MARKET TAKES ADVANTAGE

As the whole country is fighting with the shortfall, some unscrupulous individuals are taking advantage of the crisis and cashing in heavily.

Another newspaper Times of Zambia reported that the black market seemed to have a ceaseless supply of both diesel and petrol although most filling stations were dry. Of course, the prices are stunningly high. Dealers in Ndola, capital city of Copperbelt Province, were charging petrol price twice as that at filling stations.

If fuel can be available on the black market then there is some source, commented the newspaper, questioning where the fuel is coming from.

It then urged the authorities to "go deeper to find out" and cut off those backdoor deals.

FINGER POINTING AMONG POLITICIANS

The ongoing fuel shortages is the second one suffered by the country within only two months. It started two weeks ago when the country's only oil refinery Indeni in Ndola was shut down for maintenance work.

The fuel shortage this time triggered some finger pointing among politicians accusing there was no improvement after last time's fuel crisis in July and August, which was caused by the same problem.

Zambia's opposition Forum for Democracy and Development (FDD) spokesperson Charles Banda has called for on Saturday the resignation of Energy Minister Geroge Mpombo.

Banda said the minister should relinquish his position as he could only give people false hope by repeatedly saying fuel would flow into the country while the situation has not improved at all.

Other opposition leaders, too, grasped the chance to attack the government, the President Levy Mwanawasa to be specific, as they are preparing for next year's general election and bringing the president down from his position has always been their ultimate dream.

Former vice president Pastor Mumba was quoted by independent newspaper The Post as saying the fuel crisis was a sign of a failing government and he attributed it to lack of planning and ad hoc style of running the nation.

Opposition Patriotic Front (PF) President Michael Sata claimed that constant closures of Indeni were deliberate as the oil shortage was anticipated three years ago because of the corruption in the ruling Movement for Multiparty Democracy (MMD).

SOLUTIONS ONCE AND FOR ALL

Comment in Times of Zambia said it is important for the country to avoid finger pointing and unnecessary antagonism as the problem needs long term solutions. One way to deal with the problem is to set up more oil storage facilities, the essay said.

Actually, the Zambian government has been mulling over a plan to set up strategic oil reserves as a way to forestall disruptions of oil supply.

The country has spent about 2.5 billion kwacha (about 500,000 US dollars) on installing two tanks with capacity of 47,000 liters of crude oil at Dar-es-Salaam in Tanzania, where it receives its crude oil mainly from the Middle East and then transports back home for refining.

Also, the country is considering the establishment of Fuel Price Stabilization Fund through subsidy mechanism so as to stabilize fuel prices and to promote economic stability in the long run.

The landlocked southern African country has experienced several fuel supply crisis over the past decades since it has no oil production and has to import from other countries.

It is currently consuming 900,000 liters of diesel and 600,000 liters of petrol a day.

The problem is that, with only one refinery in Ndola, 360 km north of the capital, the country's oil supply still remains fragile once the refinery breaks down as proved by the latest two fuel crisis.

So, the country still has far to go before completely solving the problem which is a big threat to the healthy development of its economy.

Source: Xinhua