Govt denies US$500m oil deal with Trafigura

Energy and Water Development Minister Christopher Yaluma yesterday told parliament that the Patriotic Front (PF) government did not pay US$500 million to Trafigura for the supply and delivery of 216 million litres of expensive fuel.

This was after Kalomo Central UPND Member of Parliament wanted to know why the PF government opted to procure expensive fuel at US$500 for 216 million litres when it could have gone for other cheaper sources and spent about US$165 million for the same quantity.

In his response Mr Yaluma said, “Mr. Speaker Sir that information as far as we are concerned is not true that we bought fuel at US$500 million. I don’t know where that information is coming from. Government only paid US$260 million at a fixed cost which was in the bids, I thank you.”

But Mr. Yaluma’s response in Parliament contradicted the statement by then Energy Permanent Secretary George Zulu  who announced in his statement in September 2012 that Zambia had awarded a US$500 million (400-million-euro) contract to Trafigura to supply the country with petrol and diesel for one year.

Mr. Zulu said that Trafigura would supply Zambia with 216 million litres of petrol and 21 million litres of diesel during the contracted period starting from October the same year.

“The country is now assured of a stable and continuous supply of fuel,” he said.

Mr. Zulu further, said that the government was still talking to bidders, including Geneva-based trader Gunvor, for a separate contract to supply Zambia with 1.4 million tonnes of oil over a period of two years.

In March 2012, ten foreign firms including Glencore bid to supply oil to Zambia after a previous contract with Glencore expired in March 2010.

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