The suspension of the 25% duty on fuel imports to help "avert" the fuel crisis, following calls by oil marketing companies (OMCs) that they would delay diesel and petrol imports until the tax was scrapped, should not surprise regular readers of Zambian Economist. On the politics of Zambian petroleum we cautioned :
Increasing the taxes may prop-up Indeni and ensure that it remains viable, but it sends the wrong signals to OMCs (and Indeni). In the event that Indeni had to shut down due to an emergency, the OMCs may well be unable to resume imports in quick time as they would have no incentive currently to develop their supply chains.
Government has opened discussions with TOTAL to take over the company's shares in Indeni. This follows the decision by TOTAL to pull out of the country's only oil refinery. Mr MUMBA said the pull out of TOTAL from Indeni is not new because government was aware of the decision. Mr MUMBA said TOTAL had stopped supplying crude to Indeni two years ago and informed government of its intention to sale the 50 per cent shares held in Indeni. He, however, said the pull out of Total from Indeni has nothing to do with the current petrol shortage being experienced in the country. Government and TOTAL both hold 50 percent shares in Indeni.