Zambia Hope for Cheaper Diesel Prices as TAZAMA Pipeline Conversion Nears Completion

Zambians hope for cheaper fuel as the conversion of TAZAMA pipeline from a conduit conveying commingled feedstock to one carrying finished products, specifically diesel, is 90% complete. According to the Minister of Energy, Hon. Eng. Peter Chibwe, the project will be finished by March 18, 2023.

“All the crude oil (commingled feedstock), which was in the pipeline from the time Indeni Refinery was shut down by the PF government in April 2021 up to now, has since been removed, stored, and is ready to be ‘refined.’ This is about 78,000 tonnes or 80 million litres of fuel (petrol and diesel),” said Hon. Kapala, quoted by a local media outlet, the Lusakatimes.

Last month, the heads of the two states agreed to speed up the conversion process to help relieve fuel costs in Zambia.

Once the commingled feedstock has been processed and sold, the funds raised will be used to pay for the costs incurred in cleaning and converting the pipeline and some of the debts owed by TAZAMA Pipeline Limited the operations and maintenance of facilities of TAZAMA Pipeline.

The cleaned-up pipeline will transport diesel from Tanzania’s Dar es Salaam to Ndola in Zambia, using the older and smaller pipe, while the newer, bigger-gauge pipe will transport finished products to the Mpika terminal for uptake by tankers.

The New Dawn Government plans to expand the storage facilities and increase pumping and loading gantries at Mpika to allow for better and more efficient conveyance.

All diesel offloaded at Ndola, and Mpika will be transported to parts of Zambia using Zambian tankers only. The operationalization of the TAZAMA Pipeline to carry finished products is expected to reduce the pump price of diesel as transportation costs will be reduced.

“The government is also working on reducing pump prices of both petrol and diesel by introducing bulk purchases of petroleum products, where Oil Marketing Companies (OMCs) pool resources together and order at a known price and one which the government would have negotiated. Currently, the procurement is liberal and disaggregated, which doesn’t help the consumer in many ways,” Hon. Kapala added.

The government has already released K500m to INDENI to pay redundancies for all workers and another K32 million for clearing debts and for operations. The INDENI plant is expected to fire up and start processing the commingled feedstock by March 18, 2023.