October 17, 2009 / 8:47 AM / 10 years ago

Zambia suspends import tax on fuel to avert crisis

Zambia's President Rupiah Banda (C) tours Tazama Pipelines' Kigamboni crude oil pumping station in Dar es Salaam February 10, 2009. Tanzania and Zambia are considering privatising a railway they jointly own that hauls the bulk of Zambia's copper exports to the coast, the leaders of the two African nations said on Tuesday. REUTERS/Stringer (TANZANIA)

LUSAKA (Reuters) - Zambia has suspended a 25 percent duty on fuel imports to avert a fuel crisis after oil marketing companies (OMCs) said they would delay diesel and petrol imports until the tax was scrapped, a minister said on Saturday.

Energy minister Kenneth Konga told Reuters the government had decided to waive the duty during the period of the shutdown of Zambia’s sole 24,000 barrels-per-day Indeni oil refinery.

The refinery was closed for maintenance on Thursday, and is to reopen in the first week of November.

Zambia consumes about 2 million litres of diesel per day and 700,000 litres of petrol daily, Konga said.

Industry sources said import delays could mainly harm the copper mines, the country’s economic lifeblood.

Zambia asked local OMCs and the Independent Petroleum Group of Kuwait (IPG) to import a total of 50 million litres of diesel and 30 million litres of petrol to avert a fuel shortage.

“The import duty on fuel has been suspended for two weeks to allow OMCs to bring in the fuel at a lower price so that we don’t experience shortages,” Konga said.

The OMCs, he told Reuters, had said it would have been expensive for them to source petrol and diesel from Mozambique and Tanzania if the authorities did not rescind the tax.

Non-oil producing Zambia has previously exported petrol and diesel to the Democratic Republic of Congo (DRC) and Zimbabwe from Indeni, but relies on imports to run its industry each time the ageing refinery breaks down.

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