Chapter One Foundation has recommended an inquiry into the pricing of fuel before the implementation of the Open Access Regime. Foundation Executive Director Josiah Kalala has raised concerns over the significant price reduction from US$113 per metric ton to US$54.12 per metric ton, questioning whether previous pricing was fair or influenced by anti-competitive practices.
The concerns come in the wake of TAZAMA Pipelines Limited awarding contracts for the supply of Low Sulphur Gas Oil for May 2025 at the new reduced price. Among the awarded companies is Agro Fuel Investments Limited, an Oil Marketing Company that previously had exclusive access to the TAZAMA Pipeline and was quoting fuel at around US$113 per metric ton before the Open Access Regime was introduced.
The Impact of Open Access on Fuel Pricing
The Open Access Regime was introduced to promote competition and transparency in fuel supply by allowing multiple Oil Marketing Companies (OMCs) access to the pipeline infrastructure. The drastic reduction in fuel pricing has sparked discussions about whether past fuel costs were inflated due to lack of competition or restrictive market practices.
Calls for Transparency and Fair Pricing
Kalala emphasized the need for an independent investigation to assess whether past pricing structures unfairly burdened consumers and businesses. “The substantial price drop raises serious questions about whether the previous pricing was justifiable. An inquiry will help ensure transparency and fairness in fuel pricing,” he stated.
The inquiry could also provide insights into potential regulatory gaps and ways to strengthen oversight in the petroleum sector to prevent future price manipulation.
Industry Reactions and Government Response
Industry stakeholders have welcomed the price reduction, as it is expected to lower operational costs and benefit consumers. However, there is increasing pressure on the government and regulatory bodies to address past pricing concerns and ensure that the benefits of market liberalization are sustained.
As Zambia moves forward with an open and competitive fuel market, transparency and accountability will be key in maintaining public trust and preventing exploitative pricing practices.