Energy Forum Zambia (EFZ) says there is need to enact the Petroleum Management Bill to give all stakeholders a clear roadmap of what government’s role in the oil sub-sector will be.
And EFZ has projected fuel prices will remain relatively low for at least two years depending on the performance of the local currency against major convertible currencies.
In an interview, EFZ chairperson and energy expert Johnstone Chikwanda said stakeholders were anxiously awaiting the enactment of the Petroleum Management Bill to clarify government’s role in the oil subsector.
This follows a landmark pronouncement made by former Finance Minister Felix Mutati who told Parliament in November, 2016, that government would limit its role in fuel procurement.
Mutati had announced at the time that oil marketing companies (OMCs) would takeover procurement of fuel into the country in March, 2017.
But the Energy Regulation Board (ERB) in January, 2017, announced plans to ban OMCs from importing fuel to force them to buy from the ailing Indeni Petroleum Refinery in Ndola, signalling government’s tight grip on fuel procurement has still been maintained over two years on.
“For us, as an industry, what we are looking at is patiently waiting when the Petroleum Management Bill is going to the Parliament because that Bill is the one that is going to inform, guide and mentor how various stakeholders are going to engage in the sector. We believe our concerns have been captured in that Bill, we haven’t had sight of it, but that is something that all can anxiously look forward to,” Chikwanda said.
He explained that in the proposed Bill, the industry strongly requested government to ensure that there is sufficient exit management plan when government will be disengaged from participating in the procurement of refined products.
However, Chikwanda observed that there is political will from the current PF administration, which gives hope to the growth of the industry.
He also is impressed with the progress made so far by Britain’s Tullow Exploration Company in Northern Province, but he urged government to give regular updates on the ongoing oil exploration project.
And Chikwanda projected that fuel prices will remain relatively low for at least two years depending on the performance of the local currency against major convertible currencies.
He observed that the fundamentals that affect the fuel pump price other than international oil market prices and the performance of the local currency, were also a plethora of different factors that are loaded in the price model, which are country-specific.
“We are projecting that the oil prices are going to remain relatively low for a couple of years; our projections are that they [prices] could be still in the range of 60 to 80 US dollars per barrel over the next few years,” explained Chikwanda.
He added that fuel price models differ from country to country as rates and taxes are put into consideration.