THE REASON THE PRICE OF FUEL IS SO HIGH IN ZAMBIA
Do you know why Indeni was built? Do you know why the Kaunda government invested hefty amounts of Copper Kwachas to build the Tazama pipeline? The reason was to kill two birds with one stone by reducing the cost of bringing fuel into Zambia and making it affordable to the citizenry.
The Tazama pipeline was a joint venture between the governments of Zambia and Tanzania. TAZAMA stands for Zambia Tanzania Mafuta. Mafuta being the native nomenclature for crude (or all things petroleum). This was a necessary cost as it was aimed at reducing the cost burden on the end user over time. And it worked!
The Indeni refinery in my hometown, Ndola was where this pipeline deposited its crude. A 1,700km journey from offshore reservoirs via Dar-es-salaam. Tanzania. So why was this such a good idea?
For starters Zambia didn’t need to pay more than was necessary to pump crude into the country. It didn’t need to pay any special taxes because it bought raw unprocessed oil. The genius behind it was that Zambia could actually focus on other pertinent issues as the problem of importing fuel no longer existed after 1968. It was to say the least genius.
So what went wrong? The refinery started aging and was neglected for some time. The old slave mill was grinding slow but it was still grinding. By the year 2000 capacity of the pipeline had nearly halved. From over one million tonnes of crude per year on Inception to just over 600,000tonnes in the year 2002.
With the continuous neglect the refinery finally gave in. You might think a country with sensible people handling these operations could have prioritised this cardinal source of everyday living. But why didn’t they?
Every crisis has winners and losers. In this case a loophole was detected where politicians and their minions’ created a very lucrative system where they profited abnormally by importing refined fuel. The whole system basically works like this:
-A middleman sources finished