“THE FUEL SCANDAL: WHO LOOTED, POCKETED BILLIONS”
By Nkonkomalimba Kapumpe
The recent statement by Minister of Energy Peter Chikote on the floor of the House was not just shallow — it was deceptive, contradictory, and confused. In fact, it exposed not only the Minister’s lack of understanding of the fuel sector but also the broader incompetence and negligence within the government. What unfolded in Parliament was nothing short of an embarrassment, with MPs displaying shocking ignorance on basic economic principles — even the Speaker was visibly stunned by the Kalomo MP’s failure to grasp how the price of fuel by Oil Marketing Companies (OMCs) directly affects pump prices.
If the International Monetary Fund (IMF) or the World Bank had been watching, they would have seen a government stumbling through a critical policy issue — and looking utterly clueless while doing it.
How It All Started
When the UPND took power, they had a promising idea to reduce fuel prices by shifting from road transport to the Tazama pipeline. The strategy made sense: cutting transport costs would naturally reduce pump prices and ease the burden on Zambians.
To implement this plan, the government awarded a contract to Agro Fuel and its partner, Vitol, worth around $100 million, to make the Tazama pipeline operational. Another contract, nearly $100 million, was given to the same companies to transport the deadstock in the pipeline to Indeni.
When the pipeline became operational, the former Minister of Energy, Kapala, announced in Parliament that Agro Fuel and Vitol had been single-sourced to supply fuel. The current Minister, Chikote, confirmed that this was necessary to avoid fuel shortages — but at what cost? Agro Fuel was charging Zambia $113 per metric ton to transport fuel through the pipeline for three years — an outrageous rate.
For three years, Agro Fuel monopolized the Tazama pipeline, controlling 90% of the flow despite loud protests from the OMC Association of Zambia, energy experts, and concerned citizens. Calls for open access to the pipeline — which would have allowed other companies to compete and lower costs — were ignored. Instead of falling, fuel prices soared by nearly 50%, climbing from around K20 per liter to over K30.
This is where the accusation of economic sabotage comes in. High fuel prices pushed up the cost of goods and services, driving inflation and making any meaningful economic recovery impossible. The UPND government, which promised lower fuel prices, was now being blamed for worsening the cost of living crisis.
The IMF Steps In
It took pressure from the IMF to force the government to allow open access to the pipeline. Once this was implemented, transport costs immediately dropped by 60% — from $113 to $54 per metric ton.
Do the math: over three years, Zambia was losing between $70 million and $90 million annually — that’s roughly 2.5 billion Kwacha per year — in excess profits going to a single company. Over three years, the total loss amounted to nearly 8 billion Kwacha. This wasn’t just bad policy — it was daylight robbery.
Even Chikote admitted in Parliament that the players involved had made extreme profits before open access was implemented. Yet he stood on the floor of the House trying to spin the open access policy as a victory for the government. Victory? After robbing the Zambian people of 8 billion Kwacha? It’s like saying, “We have stopped stealing from fuel; now clap for us.”
The Hidden Truth
Chikote conveniently failed to mention the October 4, 2024, agreement between the Ministry of Energy and TAZAMA — an agreement that allows Agro Fuel to maintain a stranglehold on the pipeline. Under the deal, 50% of all fuel pumped through the Tazama pipeline will still go to Agro Fuel for the next two years to allow them to recover their $19 million in foreign exchange losses.
This undermines the very principle of open access. How can a competitive market exist if half of the pipeline capacity is guaranteed to a single player? Other OMCs that win tenders to offload 35,000 metric tons of cargo will find it nearly impossible to secure access to the pipeline. In fact, OMCs have already faced significant challenges offloading cargo in Dar es Salaam when Agro Fuel opposed it. This is not a competitive market — it’s a rigged system.
Who Benefited?
We need to know who pocketed the 8 billion Kwacha over the past three years — and who continues to benefit from these corrupt deals. This scandal points to a suspected cartel involving State House staff, the Solicitor General’s office, TAZAMA, and the Ministry of Energy. This is not mere negligence — it’s corruption on a massive scale.
The thieves and criminals behind this scheme must be exposed, investigated, and arrested. Even Chikote hasn’t denied that the government lost billions before open access was implemented. So why is the Anti-Corruption Commission sitting on its hands? Are they waiting for the President’s approval to act?
A Challenge to the President
With due respect to the President, I dare him to say:
“Arrest all those involved in fuel corruption.”
If the President issues that directive today, the arrests will begin tomorrow. The truth is already out — the people know who stole from them. The question is: does the government have the courage to confront the thieves within its own ranks?