Oil Refinery-fuel prices to drop by 30 per cent

…new refinery, pipeline coming

FUEL prices and those of other petroleum products will soon drop by as much as 30 per cent following a US $3.3 billion investment in a new oil pipeline and refinery to be erected in Ndola.

This comes after the signing of an agreement between a Zambian firm, Sub-Saharan Gemstone Exchange Industrial Park (SGE) of Ndola and Maysen & Borowski Group of Australia to construct the refinery and pipeline.

Zambia’s second refinery and the new pipeline running from Dar-es-Salaam to Ndola will see increased fuel production by an additional five million litres of fuel per day which it is projected would lead to a reduction of fuel prices in Zambia by 30 per cent. The new refinery will be using natural crude in its production process.

SGE and Maysen & Borowski Group of Australia signed the agreement in Ndola yesterday in the presence of Commerce, Trade and Industry minister, Robert Sichinga.

Maysen & Borowski Group Manager for Finance and Corporate Services, Mathew Borowski who signed on behalf of his company, said that the idea to invest in Zambia was mooted in October last year when

Vice-President, Guy Scott and Mr Sichinga were in Australia for the Commonwealth Heads of State Summit.

The Group comprises five companies, dealing in corporate risk solutions and investment.

It operates in Australia, United States of America, Canada and Africa and is headquartered in Perth, Australia. The company’s establishment in Zambia is expected complement Indeni Petroleum Refinery output.

Mr Borowski said the project would create 13,000 jobs during construction and 5,000 jobs when the entire project, which will include a dry-port, warehouse and houses, was completed.

He said although Zambia was landlocked it was strategically located for investment and trade. Zambia has easy access to the Common Market for Eastern and Southern Africa (Comesa).

“The project will increase fuel production by five times and we also want to open up the Congo DR market,” he said. He said the success of the petroleum refinery project would also create opportunities for other companies.

Mr Borowski said his company was also involved in tourism and would look at constructing mini hydro-power stations.

Zambia’s national consumption for diesel is pegged at more than one million litres while petrol stands at about 750 litres pay day.

SGE chairman, Phesto Musonda said the refinery would be built at a cost of US$ 1.7 billion while the pipeline from Tanzania to Ndola would gobble US $1.6 billion.

Mr Musonda said Zambia consumed 1.5 million litres of fuel per day and that the new refinery would be producing five million litres per day.

He said SGE was happy to partner with Maysen & Borowski Group because the petroleum refinery would come with a number of benefits besides the creation of thousands of jobs.

And Mr Sichinga said that the Government was mobilising investors and encouraging Public Private Partnerships (PPP).

He said he was impressed with the rate at which the plans for the refinery and pipeline project had progressed because it was only in October last year when the idea was discussed and already experts had assessed its viability.

The minister said foreign investors alone could not develop the country and that this was the reason the Government was encouraging Zambians to engage in partnerships.

He said that the liberalisation of the economy in the 1990’s cost Zambians a lot but that the country would re-look at what went wrong in order to create an impetus for economic growth.

A feasibility study would immediately start before construction commences at the former Ndola Copper Refinery in the Industrial Park of the industrial area.