Zambia’s fuel sector is experiencing significant shifts as Agro-Fuel Investments Limited (Agro-Fuel) continues to dominate the TAZAMA pipeline, raising concerns about monopolistic practices and their impact on competition and pricing.
Agro-Fuel’s Continued Control
Despite government efforts to liberalize the fuel supply chain, Agro-Fuel remains the sole operator of the TAZAMA pipeline for transporting finished petroleum products. Other oil marketing companies (OMCs) have expressed frustration over delays in the approval process, preventing them from accessing the pipeline and competing effectively in the market. OMCAZ president, Dr. Kafula Mubanga, emphasized the need for urgent amendments to the Zambia Public Procurement Authority (ZPPA) Act to facilitate a multi-user system for the pipeline .
Government’s Response
The Zambian government has acknowledged the concerns raised by OMCs and is working towards implementing an Open Access Framework for the TAZAMA pipeline. Energy Minister Hon. Makozo Chikote assured the public that the framework would be fully operational by April 2025, promoting transparency and fair competition in the fuel sector
Implications for the Fuel Market
The prolonged exclusivity granted to Agro-Fuel has led to allegations of unfair pricing and limited market access for other players. OMCAZ has called for a more inclusive approach, urging the government to expedite the process of opening the pipeline to multiple users to foster competition and potentially lower fuel prices for consumers
As Zambia moves towards a more competitive fuel market, the role of Agro-Fuel and the implementation of the Open Access Framework will be critical in shaping the future dynamics of the sector. Stakeholders remain hopeful that these reforms will lead to a more equitable and efficient fuel supply system in the country
