It is most unfortunate that the Government and most specifically the Anti Corruption Commission have passed a great opportunity of undertaking a thorough and comprehensive investigation into the Trafigura oil procurement corruption. The figures speak for themselves.

The statement by Chief Government Spokesman Kennedy Sakeni suggesting that the procurement contract was above board only served to raise red flags because it was common knowledge that Trafigura was number five in the criteria ranking and there is no explanation why they won the contract and why the ACC did not follow up such clearly irregular procurement.

The suggestion by Mr. Sakeni that Trafigura was an upright and honest company because it was operating in Zambia as Puma having bought off Shell BP was completely off the mark.

The logic escaped us; suffice to assume that credentials and bona fides were being created to justify the unjustified award.

It was most unfortunate  and regrettable that Mr. Sakeni said Trafigura was a highly reputable and credible company and that whatever was being insinuated around the company’s oil procurement deal with Zambia were mere assumptions with no aorta of truth in them.

Tomorrow we shall present the truth about Trafigura.

What would have helped the situation was for the Government and especially the Energy Regulation Board or indeed the Ministry responsible for energy to have given the Hon Sakeni figures to justify the US$500million award for oil that was in reality only worth a little over US$200million.

The statement by the Minister has annoyed a number of people who have actually revealed a little more than we had published.

We have come to learn that, not only was the oil overpriced but that the pump price was below the cost therefore Government had to find additional money to pay the $500million.

In other words if Government was to recover the full price paid to Trafigura the pump price for petrol should have been  a little over US$2 or K11,000 rather than the K9,991 that is currently being charged. The Government has to find the additional K1,000 or so  to arrive at the price demanded by Trafigura.

One analyst has clearly stated that: “What this means is that the so called subsidy was nothing more than payment for an overpriced product that could have been purchased from more credible sources .Trafigura contract price should have been ±US$314.2milion not US$500million and the recent price increase would not be necessary. In fact like South Africa and many other countries in the region, our pump prices should have been reduced from 1st May 2013 to US$1.33 per liter or Kr 7.049. In addition the Government could have saved US$ 186 million or Kr 4.16 per liter which could easily translate into pre-pump taxes. But even if Government wanted to be greedy and taxed another Kr 1.68 per liter to get their Kr 398.2 million back to the treasury, the filling station pump price shouldn’t have exceeded Kr 8.73 per liter, a nice increase of Kr0.5 per liter.”

We hope the Government will tomorrow stand by its statement of remaining “Unflinchingly committed to transparent and accountable utilization of public resources for national benefit.”

We hope the Government will be transparent and offer a clear explanation of the Trafigura contract.


Categorized | Editorial

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