GOVERNMENT has approved the sale of 49 per cent shares in Indeni Oil Refinery in Ndola, Mines, Energy and Water Development Minister, Christopher Yaluma has told Parliament. The Government is in the same vein, looking for US$410 million for putting up a new refinery. Mr Yaluma said this in Parliament in Lusaka yesterday when he issued a ministerial statement on the removal of subsidies on fuel. “Cabinet approved the letting go of 49 per cent shares in Indeni to a private investor. The reason being to boost funding and find means of building a new refinery urgently,” he said. He said the Zambia Development Agency (ZDA) was already interacting with possible partners and that while this process was going-on Government was equally looking for the $410 million for the new plant. On the removal of subsidies on fuel, the Minister said as a result of maintaining subsidies, Government’s capacity to collect the Strategic Reserve Fund was being compromised and resulted in the lack of progress in the construction of petroleum infrastructure around the country. Mr Yaluma said a total of K2.4 billion was used to sustain the fuel subsidy from 2009 to 2013. He said Government had a programme to construct provincial fuel storage depots as well as rehabilitation of the national storage facilities in Ndola and the Bitumen unit at the Indeni plant. He said under the first phase of the programme, the Lusaka and Mpika storage depots as well as the rehabilitation of the Ndola fuel terminal were close to completion, while for the Solwezi project, the contractor would soon mobilise to the site. The contractor would also mobilise to the Mongu site, in the course of this year, but this would be once the three- kilometer access road had been worked on to allow heavy duty vehicles carrying materials to reach the site. Under the second phase of the programme, fuel depots would be constructed in the remaining provinces, namely Central, Eastern, Luapula, Northern and Southern Provinces. Mr Yaluma said construction of fuel depots would reduce reliance on the Ndola fuel terminal, as well as improve efficiency in the distribution of fuel and that in the long run, the programme was expected to reduce logistical costs in the distribution of fuel and hence lead to lower fuel prices. “Therefore, the removal of subsidies on fuel will ensure that the Strategic Reserves Fund has adequate resources to accelerate the completion of petroleum infrastructure development programme,” he said. In addition to the removal of the five per cent import duty, Government had commenced the process of reflecting taxes on fuel in absolute values as opposed to the current system where taxes were reflected in percentage terms. “This is also a way of mitigating the compounding effects of the increase in the price of fuel. This measure, however, requires an amendment to the law and will therefore be presented to this August House for consideration,” he said. Additionally Cabinet had decided that there would be periodic fuel price reviews in line with economic fundamentals and reiterated that the removal of subsidies would in the long run be beneficial to all Zambians.
Posted on: Fri, 05 Jul 2013 06:09:04 +0000
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