ERB suspends importation licenses for OMCs

The Energy Regulation Board (ERB) has suspended fuel importation licenses for Oil Marketing Companies (OMCs) in public interest to allow for a smooth transaction before the Private Sector takes over the procurement of petroleum products.

ERB Director Consumer & Public Affairs Agnes Phiri has told QTV News in a statement that following notices of intention to suspend importation of petroleum products sent to OMCs on 10th January 2017, the ERB on 16th January 2017 further clarified during separate meetings held with the effected licensees that the suspension was merely an interim measure and did not amount to a revocation.

Ms Phiri says the suspensions were also meant to curtail misconduct in the sector which had resulted in some unlicensed entities engaging in fuel importation, contrary to the Energy Regulation Act Chapter 434 of the Laws of Zambia which prohibits the importation of petroleum products without valid licenses.

Ms Phiri explains that other malpractices involved some OMCs wholesaling petroleum products and offering 30 days credit to their counterparts, when they do not hold wholesale licenses duly issued by the ERB.

She says the regulator is also aware that some OMCs were evading tax through the imports by abusing the SADC rules of origin provision and ignoring ERB license conditions which only allow for the transportation of imported fuel to deposit and not directly to service stations, a measure meant to closely monitor the quality of fuel.

She adds that as a result, the government suffered losses through tax evasions through OMC imports and inability to have its fuel offloaded and sold on the market thereby incurring demurrage and related costs.

Ms Phiri says while acknowledging the apprehension expressed by OMCs following the suspensions, the ERB has a duty to act in the public interest through balancing the needs of stakeholders in the energy sector as well as ensuring security of supply at all times.

She furthermore states that the ERB wonders why OMCs reportedly landing fuel for as low as K9.00 did not immediately pass on the benefit to consumers by selling petroleum products more cheaply.

She furthermore explains that pump prices determined by ERB are based on products to be uplifted from TAZAMA, and therefore the cheaper imported products should have been priced differently.

Leave a Reply

Your email address will not be published. Required fields are marked *

*