Zambia: State Bans BP

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The Times of Zambia (Ndola)

15 August 2008
Posted to the web 15 August 2008

Reporter

THE Government has banned British Petroleum (BP) from buying petroleum products from Tanzania Zambia Mafuta (Tazama) until the giant oil firm liquidates a debt of K26.1 billion.

Energy and Water Development Permanent Secretary, Peter Mumba said BP had been in a habit of defaulting on payments for the diesel it buys from Tazama.

Mr Mumba said at a Press briefing at his office yesterday that the diesel shortage in the country was a result of BP not stocking up the commodity.

He said BP had the largest number of filling stations in the country and in most of the stations, it did not have diesel, thereby creating a shortage of the commodity.

He said other oil marketing companies (OMCs) such as Total and Engen were doing better than BP.

"One wonders what has happened to the giant known as BP. We have stopped BP from picking fuel because they are owing Tazama huge sums of money," he said.

Mr Mumba said initially, BP owed Tazama K42.1 billion as at last week and the amount stood at K37 billion over the last 35 days.

The company made a part payment yesterday to bring down the debt to K26.1 billion.

"We have put pressure on BP to pay just like anybody else is doing in this sector. BP enjoys a lot of presence on the market and have a big network and commands a lot of influence," he said.

Mr Mumba said there were enough fuel stocks at Tazama which did not warrant any diesel shortage in the country.

He said last week, BP bought 450,000 litres of diesel from Tazama but wondered why its filling stations did not have the commodity.

Mr Mumba said BP was a major supplier of diesel to the mines and that it had brought instability in the operations of the mines because of the shortage.

He urged the mines to start buying diesel from other oil marketing firms following BP's ban from buying fuel from Tazama.

He also appealed to the Zambia Competition Commission (ZCC) to ensure that there was a level playing field among all oil marketing companies.

Mr Mumba said the Energy Regulation Board was pursuing the matter with ZCC to seek fairness in the sector.

He said the distorted playing field had resulted in the consumers bearing the effects.

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Mr Mumba said there was need for more players in the sector currently dominated by BP, which has a market share of 46 per cent.