For more than six months now, the government has not paid crude oil suppliers.
And government sources have told the Watchdog that there could be interruption in supply of finished petroleum products very soon due to the same failure by the PF government to pay suppliers.
Meanwhile, the oil suppliers such as Sahara, Hashi, Independent Petroleum Group of Kuwait and Others that were corruptly contracted to supply fuel have failed due to lack of capacity. The questionable oil suppliers that were imposed on the Ministry of energy by state house officials such as Kaizer Zulu and Amos Chanda have not even been issued with Letters of Credits which they require to start supplying. The banks are refusing to issue Letters of Credit because Zambia’s credit rating is currently very poor and international banks believe it has no capacity to pay back.
The PF government however signed contracts with these companies in March.
The government is currently relying on a few Oil Marketing Companies (OMCs) that were granted permission to import oil directly after the PF removed excise duty on such products thereby making the country lose revenue in form of tax. Industry sources tell the Watchdog that even this process is laced with corruption as only OMCs that pay bribes to State House are allowed to import oil.
Other sources tell the Watchdog that the PF, which is now running the country on credit, is buying time and will not pay oil suppliers before the elections. The PF plans to leave the oil and other debts to the next government to sort it.
But there are chances that the oil suppliers will lose out as the next government might repudiate and refuse to pay these debts.