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Wednesday, 8 August 2012

Oil Supply in Zambia

A recent parliamentary report on the state of petroleum industry in Zambia is embedded below. It notes that :
"....petroleum products in Zambia, which are the highest in the region, could be cheaper....fuel products are being kept superficially high due to impediments in the petroleum sector which include issues of policy, planning, recapitalisation, procurement and taxation...".
It's solution? More big government :
"There is need for a transparent tendering system for the procurement of crude oil and finished products with preference being given to oil marketing companies already invested in Zambia. In this regard......recommend that an independent, professional statutory body be established and charged with procurement of petroleum products. This will enhance efficiency, transparency and accountability in the procurement of petroleum feedstock..."
That of course is not the answer. The problems facing oil supply in Zambia are the same problems facing maize marketing. Inefficient government involvement in systems where its role should be purely to maintain strategic reserves and leave the rest to market forces, underpinned by appropriate favourable taxation framework. It is not rocket science! 
Parliamentary Report on Oil Supply in Zambia

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