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Sunday, 18 May 2014

Energy Developments (Kariba, Oil, Indeni)

The EU says Kariba Dam is a disaster waiting to happen. It estimates that around $100m is needed to repair the dam. The 128m tall dam was built in 1955 under the British colonial Federation of Northern Rhodesia, Southern Rhodesia and Nyasaland. Zambia and Zimbabwe have reportedly only got three years avert disaster have been met with near-panic. The only challenge is where to get the money. A tricky matter internationally given Zimbabwe is one of the partners (Source: Times of Zambia, The Economist)

Energy Minister Christopher Yaluma says GRZ is looking at ways of reducing the cost of fuel. He says,"a multi-fold approach of initiatives is being undertaken by the central bank through forex injections and construction of strategic storage facilities [in each province]". Another avenue being pursued is to eliminate 'unwanted' middlemen by signing agreements at Government to Government level. He also believes that there is a 60 per cent chance that the five firms awarded nine licences between them to prospect for oil would discover oil (Source: Lusaka Times)

GRZ has no intention of liberalising the fuel sector to allow oil marketing companies (OMCs) enter into direct importation of finished petroleum products. Energy Minister Chris Yaluma says "the Government cannot give up the current monopoly in the importation of fuel because this will allow distortions in the pricing of the commodity".  He also says it is important for Zambians to understand that fuel price increases are "market driven" and that  Government has no intention of reintroducing fuel subsidies (Source: Times)

Indeni petroleum refinery is ready to start producing bitumen following the rehabilitation of a manufacturing plant at a cost of K100 million. Energy PS Charity Mwansa says the plant now has a capacity to produce 100,000 litres of bitumen per day. The plant has already undergone trials to ascertain its efficiency and it is expected to supply one third of the bitumen for Road Development Agency projects (Source: Times)

AUTHOR
Chola Mukanga 
Economist | Consultant
Copyright © Zambian Economist 2014

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