The TAZAMA Pipeline Open Access Selection Committee has awarded contracts to three companies to supply low-sulphur gas oil to the Zambian market in April 2025. The successful bidders include Indeni Energy Company Limited, a government-owned entity, alongside Boltt Global Solutions Limited and a joint venture between Titanium Oil Corporation and ADNOC (JV).
The announcement, published on the Ministry of Energy’s website, outlines that each company will supply 35,000 metric tons (MT) of low-sulphur gas oil. The total cost for each supply contract is set at USD $2,940,000, with a contract premium or margin offer of USD $84 per metric ton.
A Shift in Zambia’s Fuel Supply Landscape
This development marks a significant milestone in Zambia’s efforts to diversify and streamline the fuel supply chain. By involving multiple entities in the supply process, the government aims to ensure a steady supply of low-sulphur gas oil, enhance competition in the market, and stabilize fuel prices.
Indeni Energy Company Limited’s participation signals the government’s commitment to leveraging state-owned entities to secure the nation’s energy needs. At the same time, the inclusion of private sector players like Boltt Global Solutions and the Titanium Oil Corporation-ADNOC joint venture highlights a collaborative approach to addressing the country’s fuel demands.
Key Details of the Tender
- Total Quantity: Each supplier is contracted to deliver 35,000MT of low-sulphur gas oil.
- Contract Value: The total contract for each supplier is valued at USD $2,940,000.
- Premium/Margin Offer: The contract includes a margin offer of USD $84 per metric ton, which reflects the additional cost for transporting and processing the commodity.
Implications for the Zambian Market
The move to utilize the TAZAMA pipeline for fuel supply is expected to enhance efficiency and reduce transportation costs compared to traditional road or rail-based delivery methods. Low-sulphur gas oil is a cleaner-burning fuel, and its increased availability aligns with Zambia’s goals of reducing environmental pollution and adopting more sustainable energy solutions.
The decision to award contracts to multiple suppliers also mitigates risks associated with supply disruptions and fosters competition, which could result in better pricing for consumers.
Government’s Strategic Focus
The Ministry of Energy continues to emphasize the importance of maintaining a consistent and reliable fuel supply while supporting local and international partnerships. By utilizing the TAZAMA pipeline, the government is not only improving logistical efficiency but also reinforcing Zambia’s position as a regional hub for fuel distribution.
As Zambia approaches April 2025, the awarded companies will begin preparations to meet their contractual obligations. The successful implementation of these agreements will be crucial in ensuring the stability of the energy sector and the broader economy.