ENERGY MINISTER DEFECTS policy be adhered to in order to sustain a self-financing
(This is a flashbackW E have started the year 2021 against a backdrop of signifarticle I wrote icant challenges precipitated by the global pandemdated 4th ic-Covid 19. June, 2011) doubt, 2021 will be a challenging year as well because of a COVID-19 enviro
TIt is undeniable that global economies including Zambia in particular have suffered untold misery because of the same. HINGS With are a second getting wave of interesting attack underway ahead and economic of the June activities 8, 2011 going on under Organisation a new normal, of it the is expected Petroleum that Exporting oil prices on Countries the international (OPEC) meeting market will in Vienna, continue Austria. being relatively With low with the low OPEC level fluctuarotattions ing presidency with an overall being upward taken
trend. over by Iran, Iranian iron
However, should mafisted President Mahmoud
jor economies go into lock
Ahmadinejad recently tempo
down, the global oil prices
rarily appointed himself Oil
are likely to nose dive once
Minister in a move that would
again. If no major lock down gets have underway, seen him country address spethe cific Vienna situations meeting which and deliver impact a on keynote the speech exchange as incoming rate are likely OPEC to president be the in main his capacidriver of ty as the caretaker direction Oil Minister fuel pump for prices Iran. will take.
It is widely speculated that he was going to use the platform FUEL as a golden PRICING opportunity to bolster and push for oil price increase to help Iran’s struggling Fuel economy price and adjustsomehow try to protect and consolidate
ment- In order to his power at home as he con
guarantee enerfronts a growing split with the
gy security and nation’s supreme leader.
His standing has been de
forestall teriorating due further to a sustained power debt struggle accumulation, with Iran’s supreme it has leader, been directed Ayatollah Ali Khamenei. that the 60 days’
No price doubt review Mr. Ahmadinejad, policy be given adhered such an to opportunity in order to es
sustain a self-financpecially with what is going on in the ing Arab mechanism world, would in the have
sector. more likely used the platform to assert and proclaim his own importance in the Iranian leadership. Because energy is an essential The commodity, split with Ayatollah it is expected Khamenei, that who Government was the and President’s oil marketing strong ally compawhen he nies was first (OMCs) elected will in 2005 continue and to again import in 2009, fuel in emerged the country last and month continue when Mr. to Ahmadinejad constructively dismissed engage Heydah on Moslehi, matters the of mutual chief of interest the powerful in order intellito build gence upon ministry energy which security is conand trolled energy by the diplomacy supreme leader, No
2021
Ayatollah Khamenei.
The supreme leader ordered that Moslehi should be reinstated in his post. To add salt to the With wound, a national Mr. Ahmadinejad eleclater tion in on August, proceeded 2021, and axed three the environment cabinet ministers could including pose challenges the Oil Minister for the and appointed actualization himself of what caretaker is Oil on the Minister dashboard. just in time for the OPEC conference where he could project himself on the world stage and deliver a keynote speech.
Oil producing and exporting countries are normally represented by Oil Ministers and not Presidents at OPEC conferences. Mr. Ahmadinejad’s intention has however been blocked by the Guardian
Council, that pricing Iran’s should constitutional be cost watchdog reflective. body However, which as highruled that lighted he could on the not dashboard serve in the of oil the ministry economic role. recovery plan,
Government This means has Iran accumuwould be lated represented USD727.3 by a non million Oil Minister debt payable unless to he suppliers appoints of one fuel before as at June 8, 2020. 2011. These
arrears And the have drama accumulated in Libya took since another 2016. It twist is likely when that country’s Government Oil Minister may have Shukri slid Ghanem into fuel subsidies recently to defected cushfrom ion the public regime among of embattled other
factors. I must emphasize
operation leader by all Muammar means” Gadhafi due to the violence sweeping the North African country.
Ghanem told reporters at a news conference in Rome that he left his job due to the “unbearable” violence in Libya and the daily “spilling of blood” he witnessed there.
His defection was well re
ceived 2021. by the rebel movement National Transitional Council (NTC). Report Mr. on Ghanem the cost was of due serto represent vice study Libya to be at submitted. the OPEC conference The report but has he recently dragged said on he and would its not completion represent Libya. got
The affected NTC by would a number prefer he of represents factors which them at include the OPEC. the They outbreak have been of pushing COVID-19. to attend This the study, OPEC being meeting. underNo invitation taken by has a European this far been based extended consultant to them. will It remains clarify unon clear the who contentious will represent electricity Libya
tariffs in various consum
Renegotiation of the electricity tariffs between Independent Power Producers (IPP) and the national power utility company. We are not privy to these contracts but can only speculate that since these contracts are in US Dollars, the depreciation of the local currency in a COVID-19 environment has drastically affected the ability of the utility company to mobilize enough Kwacha, convert it into US Dollars and pay IPPs their dues which are in US dollars. The utility company buys power in US Dollars and re-sells it in Zambian Kwacha by and large. It is undeniable that the utility company is owing suppliat the ers OPEC outstanding meeting. amounts
Among in millions OPEC of Dollars. members, only Qatar has recognised the NTC as the authorised representative of the Libyan people and it remains unclear what procedures would have to be followed by OPEC itself to recognise the rebels who are controlling the entire eastern
Libya and almost all oil facilities Energy and ports. sector reforms. It is
Whatever expected that the the case, ongoing the NTC reforms cannot will be ignored. be taken The to oil another wealth is level virtually with in a their view hands. to improving Libya, a key the sweet efficiencrude exporting cies across nation sector which instituwas producing tions and some the industry 1.7 million as
a whole. barrels a day before the rebellion broke out in mid-February, Renegotiations has seen its output with slashed fuel since suppliers. the revolt Government began. is According still participating to in the
procurement of refined fuel. Government resolved to disengage from participating in the procurement of refined fuel in 2017. Had this policy been implemented fully, the outstanding arrears in the range of $700 million would not have acInternational cumulated Energy to this Agency, much. Libya’s However, exports the averaged process 1.49 of million enacting barrels the per day Petroleum before the Management uprising, with Bill 85 has percent takof en that long. export It is business expected going that to Government Europe. There may is virtually negono tiate exports with taking current place at fuel the moment suppliers although to supply the rebel the movement industry has directly made and a couple indiof exports rectly instead through of Qatar. supplying The country to Government. has also been plunged Governin ment a crippling will also fuel negotiate shortage. Libya the has purchase the biggest price proven of fuel oil (CIF) reserves with in Africa. its suppliers fol
lowing the conclusion of
It will be interesting to fol
a detailed price review of
low what will happen in the
the cost elements.
build up to this OPEC conference. Libya’s rebel National Transitional Fuel price Council adjustment- wants to In represent order to the guarantee oil-rich country energy
security and forestall fur
while Libya maintains that it
ther debt accumulation, it
will be represented by the Oil
has been directed that the
Minister who is reported to
60 days’ price review polhave icy defected. be adhered to in order
In to my sustain opinion, a self-financing it may be wiser mechanism to invite two in representhe sectatives; tor. Inability one from to the ensure camp of a the self-sustaining embattled Gadhafi financing and the mechanism other one from is a the definite rebel National harbinger Transitional for unhealthy Council. At fuel the related moment subsidies. Colonel An
extract from the Econom
Gadhafi has no control of almost all oil facilities so there is little he can influence but at the same time it must be remembered that the comrade is still the leader of Libya even though he said he would not resign because he didn’t hold any official position to resign from.
According to him, power was already with the people and not with him. So there was nothing to resign from. The other focus will be on the behaviour of the incoming president of OPEC (Iran).
There is a real push to increase FILE: ZESCO the price Muzuma of substation crude being oil.
upgraded to KV 330 (from KV 220) in
The presidency may be going
order to be connected to the national
to Iran but real OPEC power
grid as soon as the Maamba coal plant sits station in the is commissioned belly of Saudi Arabia, a nemesis of Iran.
*Johnstone Chikwanda is an Energy expert, Researcher, and a Fellow of the Engineering Institute of Zambia, a PhD candidate at Johnson University, Knoxville, Tennessee, USA. Email: j_chikwanda@yahoo. com