February 14, 2011 [AllAfrica] - Zambia will in the next five years raise the national bulk fuel storage capacity to one month from the present 15 days in order to maintain steady fuel prices and supply.
According to the Sixth National Development Plan (SNDP), the Government wants to ensure that it attains a 100 per cent increase in the existing infrastructure for strategic bulk petroleum reserve and that it would spread the location of the storage facilities.
The plan which runs until 2015 says the increase in the storage capacity of fuel would guarantee availability of sufficient quantities of commodity to support the development processes in the growth sectors of the economy, especially agriculture and manufacturing.
“The main thrust in the fuel sub-sector in SNDP would be an increase of over 100 per cent in the existing petroleum bulk storage facilities in order to achieve 30 days petroleum strategic stock. More focus will be on facilitating construction and rehabilitation of storage facilities countrywide.
The Strategic Petroleum Reserves would also help to streamline the fuel supply chain to make it more efficient and cost effective,” the SNDP says.
Zambia has previously experienced critical challenges in the fuel sector because of limited reserves which has seen tghe Government allowing Oil Marketing Companies (OMC) import finished petroleum products when routine repair to the Indeni Petroleum Refinery are prolonged.
This has led to instability in the sector with long queues at fuel service stations.
The SNDP says strategic reserves would be constructed Lusaka, Southern and the Western provinces to supplement the storage tanks which are in Ndola where the Indeni is also located.
Setting up strategic reserves is set to promote efficiency and effectiveness in the existing fuel delivery systems.
This would also assist in developing a mechanism for promoting the setting up of petroleum businesses in rural areas.
Energy Minister Kenneth Konga recently announced that Government would construct a 24 million-litre strategic oil reserve in Lusaka and that rehabilitation works were already on at the Ndola fuel terminal in a bid to establish long strategic fuel reserves.
Zambia imports as much as 180,000 tonnes of crude oil for every 45 days from Kuwait through Tanzania, and pumps the crude via a 1,700 kilometres TAZAMA pipeline to the country’s sole refinery, Indeni in Ndola.
Meanwhile, Mr Konga has said that increased mining activities in Zambia have led to a rise in the demand for diesel storage facilities.
The minister said this when he commissioned Oryx Oil Zambia (Dag) Service Station in Ndola on Friday.
Mr Konga said the opening of the filling station was in line with the Government’s policy to have strategic fuel reserves.
He said that Oryx with its focused investment had positioned itself to service the mining industry which remained the backbone of the country’s economy.
Mr Konga commended Oryx Zambia’s decision to invest in Liquefied Petroleum Gas (LPG) infrastructure.
Oryx Oil Zambia, last year commissioned a one-million litre diesel storage depot and the company was constructing LPG storage and filling station plant in Ndola’s industrial area.
He said that the Government through the Energy Regulation Board (ERB) had commissioned a task force on the increased domestic usage of LPG.
Speaking at the same function, company chief operating officer Thierry Genthialon said that Oryx oil Zambia would be the first oil marketing company to venture into LPG marketing in a broad way.
Mr Genthialon said that Oryx oil and gas had immense expertise in LPG installation and that they would share it with the Government’s task force.