Kamanga cautions against downplaying the looming war-linked…

Energy expert Andrew Kamanga says Zambia needs to start employing emergency measures to mitigate the expected effect of the war-linked fuel supply risks rather than downplaying its impact on security of supply. Kamanga has warned if the fuel crisis starts manifesting, accusations that Oil Marketing Companies (OMCs) are hoarding fuel stocks will surface. Although the government has assured of reliable fuel supply even as the war rages on in the Middle East, some parts of the country have started reporting sporadic shortages of diesel in some service stations.

In a conversation with Frank Mutubila on online BMTV Zambia, Mr. Kamanga said recent gains the country has scored such as stabilizing kwacha, decelerating inflation and reducing fuel prices are at risk of erosion due to the Iran-US war which has triggered a jump in global oil prices. Kamanga said while increases in pump prices is almost inevitable, the greatest risk the country faces is possibility of not having fuel on the market as the war continues to rage on with no clear sight of conclusion.

“I listened to a number of statements from both ERB and Ministry of Energy and they have been talking about having enough fuel stocks but that may not be enough for the size of the economy we are running,” Mr. Kamanga said. “The war definitely is going to be a big issue for us because Iran is the third largest producer of oil among OPEC countries… we should be calling for emergency measures; we should be thinking about… if this is going to last another two or three months or another year, how do we manage our situation as a country to ensure that we insulate ourselves from the effects of war.

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So, planning is key and I am sure the government must be taking care of those areas but as a people we also have a responsibility to ensure that we are prepared adequately because any distortion that will come out of any fuel pricing impact, it would destabilize the whole economy.” Mr. Kamanga said Zambia remains among the most vulnerable countries as it does not have enough fuel storage capacity as OMCs are not mandated to own depots for storing physical stocks as part of the country’s strategic fuel reserves. He said the law that allowed OMCs to have depots for longer term storage of fuel needs to be reinstated.

“We need to step in in ensuring that we have enough fuel physical reserves within country – that is a must. And for this war, the impact is yet to be felt here,” he said, adding that, “As a country that is landlocked, the economy has to continue functioning and this is where it becomes very important that we need to have physical strategic fuel reserves.” According to Mr. Kamanga, if the fuel crisis was to be triggered, accusations that OMCs were hoarding fuel in anticipation of future higher price will start surfacing.

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