Resuscitation of TAZAMA, Indeni to stabilise fuel prices

The Luapula Chamber of Commerce says it is optimistic that measures underway by Government and its stakeholders to revamp the TAZAMA pipeline and redesign INDENI operationalizations into active service will ease the cost of doing business in the country as fuel prices will drop to a stable projection.

And the Luapula Chamber of Commerce has implored farmers in Luapula to work towards increasing cassava cultivation for the potential ethanol production market which positions to supply as feedstock towards part of the redesigned INDENI fuel blending facility once operationalised.

ZANIS reports that Luapula Chamber of Commerce President, Emmanuel Munsanje notes that the Chamber of Commerce acknowledges that the fluctuating fuel cost model currently in use by the Energy Regulation Board is a cost-reflective method determined by global fuel market dynamics which when on the high end of pricing, has escalated the cost of doing business to local entities.

Giving his economic perspectives on fuel price and exchange rate stability, Mr Munsanje said inconsistent fuel pricing correlates to hiked or reduced refined fuel imports costs by Oil Marketing Companies (OMC), a situation that has not been well grasped by lay persons and led to hike of goods and services with minimal or no reductions to trading costs whenever a fuel reduction is effected under the monthly pricing model.

“This is the narrative that has not been well understood by the common man because there is a sense of suspense and ignorance as to the fact that the monthly pricing fluctuations are at the mercy of international fuel market dynamics, exchange rate, and of OMCs who are the direct outsourcers of the commodity from the global market,” he said.

Mr Munsanje said the Luapula Chamber of Commerce is one of the stakeholders that believe that though challenging the current trade and commerce environment will soon harmonise and be competitive.

He said this follows indications of interventions underway by authorities to bring sanity to the sector which was inherited debt-riddled and chaotically at the mercy of middlemen since the closure of INDENI refineries and erratic TAZAMA utilisation.

Mr Musanje said with the full operationalising of the TAZAMA pipeline and redesign of INDENI to include ethanol fuel blending once reopened, a significantly fair fuel reduction is expected and will translate into reduced cost of doing business and increased production of goods and services as a stimulus to the local fuel reforms and production.

“We are therefore asking our farmers and those who can get into cassava out-grower schemes or clusters so as to create cassava satellite bulking facilities meant to tap into the ethanol feedstock fuel production value chain because the province stands to greatly economically and socially yield trickle benefits from this process,” he said.

Mr Munsanje also noted that the issue of exchange rate stability will equally stand to gain in value terms for the Kwacha as increased local production of goods may lead to the low cost of production and increased local product uptake as well as exports of manufactured goods, which are critical determinants to currency gains aside traditional metal export dependence.

He said the cost of living for people in areas like Luapula province will greatly transform for the better once the fuel reform expectations to balance price consistency and supply cover are implemented by the government in the medium to long investment period outlook.

The Luapula Chamber of Commerce President further observed that once the critical aspects that culminate into fuel cost reduction are realised, the stability will position the central bank to reduce monetary policy interest lending rates to harmonise liquidity in the financial sector and make borrowing attractive for prospective business entities from banks and financial lending institutions.