OIL FIRM QUITS

…parks tankers as foreign transporters suffocate market

What is happening is that suppliers of Government fuel don’t want to pay for the storage of their fuel from the countries of origin and are abrogating loading schedules given by the Ministry of Energy by loading the commodity mostly in foreign tankers at once. — Mr Tembo

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INFLUX of foreign companies which are getting fuel importation contracts from suppliers has forced Unitrans, one of the biggest fuel transporters in Zambia, to close down its business, citing lack of business.

In a notice of membership cancellation to the Petroleum Transporters Association of Zambia (PTAZ) signed by the company’s contract manager, a Mr L Groenewald, dated June 10, 2019 the Unitrans complained of lack of financial stability.

Mr Groenewald said the company was folding up its operations because of unfair competition posed by foreign companies as Zambian transporters were not given any preference to grow their capacity.

“Unitrans is folding up the fuel operation in Zambia due to being no longer financially stable, the reasons being foreign transporters’ unfair competition (as there is) no preference given to Zambian fleet, resulting in loading and offloading delays.

“(There is) also poor turnaround times in meeting the three loads per vehicle per month to achieve a profitable business coupled with payment delays, which affect cash flow and increased financial liabilities,” Mr Groenewald said.

PTAZ secretary general Benson Tembo acknowleged receipt of the notification and described the situation as unfortunate.

“We are talking about a company with 15 tankers.

We are talking about a number of people losing jobs and rendering their families and dependants’ destitute. When you see an influx of tankers waiting to offload fuel at our depots, you think local transporters are doing fine, but in the actual sense, we are being kicked out of business every day.

“What is happening is that suppliers of Government fuel don’t want to pay for the storage of their fuel from the countries of origin and are abrogating loading schedules given by the Ministry of Energy by loading the commodity mostly in foreign tankers at once.

“Once these tankers have loaded, they do not incur any cost because they are used as storage facilities.

“They don’t care how long tankers take before offloading because they don’t pay for anything.

This means that the three trips we were making as local transporters in a month have been cut because we are wasting more time waiting to offload.

More companies will close in similar fashion unless Government intervenes,” Mr. Tembo said.

The petroleum sub-sector has been rocked by numerous controversies, including the parking of tankers by drivers in protest at what they have described as unfair practices by the government which put local transporters at a great disadvantage.