Government in Talks with Dangote Over Cheap Fuel

The government, represented by Energy Minister Makozo Chikote, has embarked on negotiations with the Dangote Petroleum Refinery in Nigeria, with a view to increasing its fuel imports from the country and driving down costs in Zambia.

Mr Chikote was also accompanied by the Energy Regulation Board Chairman James Banda. The meeting comes shortly after the Ministry of Energy awarded a series of contracts to other companies, such as Indeni Energy Ltd, to ramp up the importation of low sulphur gas oil through the TAZAMA pipeline. This multi-pronged approach to revamp Zambia’s energy policy is timely given the devastating effects of last year’s drought, which exposed the country’s overreliance on hydroelectric power from the Kariba Dam, leading to widespread blackouts.

Mr Chikote’s priorities are to enhance fuel affordability in Zambia, and to diversify the country’s access to petroleum, which is currently dominated by overseas imports from the private sector. Gaining access to Africa’s largest refinery, with a staggering capacity of 650,000 barrels per day, will significantly increase supply thereby lowering consumer costs and affording the public sector a greater role in the industry, the government contends.

Furthermore, the intra-continental importation of petroleum in line with the African Continental Free Trade Area (AfCFTA) framework will help Zambia avoid tariffs and diversify the means through which petroleum is imported into Zambia, lessening the country’s exposure to shocks in the global maritime trade network.

In a statement, the Ministry of Energy summarised Mr Chikote’s goals to “leverage intra-continental investments to reduce dependence on overseas markets [and] build a self-sufficient continent”.

The government hopes that this pivot towards a diverse range of energy sources, coupled with African solidarity and self-sufficiency, will make Zambia better placed to navigate the complexities of the energy sector.