The Oil Marketing Companies Association of Zambia […]

The Oil Marketing Companies Association of Zambia (OMCAZ) has indicated that the country’s petroleum sector is increasingly being defined by a widening gap between licensed players and those actually participating in the market.

 Research done by Zambian Business Times-ZBT revealed that the industry has more than 50 companies holding petroleum marketing, wholesale, or procurement licenses.

 Meanwhile, according to the Energy Regulation Board (ERB), only about 18 to 19 oil marketing companies maintain active retail networks and fully operational service station businesses across the country. The disparity has raised questions about whether obtaining a license has become easier than actually surviving in Zambia’s petroleum sector.

Speaking in an interview with Zambian Business Times-ZBT, OMCAZ President Dr. Kafula Mubanga attributed the situation to what he described as an absence of meaningful incentives for indigenous petroleum companies.

 “The real issue is around incentives that the government would put in place when you look at this regime, not specific incentives for small and medium enterprises,” said Dr. Mubanga.

He argued that previous policy frameworks provided clearer guidance on local participation and ownership within the petroleum industry. “The previous government would give a clear indicator of what they want the locals to participate in, at what level, and what percentage of the national stake they should take,” he said.

 According to Dr. Mubanga, many indigenous companies were able to find space within the sector under those arrangements and actively participated in petroleum supply chains.

 However, he contended that the current policy environment has created a disconnect between local market players and opportunities within the industry. “This government has not paid any attention to that sort of approach and therefore created a gap between the market players and the locals,” he said.

Dr. Mubanga further suggested that some petroleum sector decisions have concentrated opportunities among a small number of players while leaving many licensed companies sidelined. “It was the government choosing a few individuals that covered their interests to ensure that the interests were protected at the expense of the other remaining licensed OMCs,” he said.

Article by Phillip Sinkala