Zambia imports all its petroleum requirements which contribute 9% to the national energy demand. Petroleum is a key input in the Mining and Transport sectors on which trade and commerce depend. Established infrastructure for petroleum import and processing include the 1,706kilometre pipeline which runs from DaresSalaam in Tanzania to Ndola, a Petroleum Refinery with a design capacity of 800, 000 tonnes per annum and the Ndola Fuel Terminal.

The procurement of petroleum feedstock for processing at the refinery is done through international competitive bidding. The feedstock is transported through the pipeline to the refinery. The finished products are marketed and distributed by privately owned Oil Marketing Companies (OMCs).

In terms of petroleum consumption, the transport sector (53%) is the biggest consumer of the petroleum products followed by the mining industry (27%) as shown in the Figure 3 below.

Proven coal deposits are estimated to be over 30 million tonnes . Probable coal reserves at Luangwa North, Luano, Lukusashi in the Luangwa Valley and Kahare, Chunga, Lubaba in the Western trough system are believed to be in the region of several hundred million tonnes though more exploration work is required to ascertain the exact nature and extent of the deposits.

Currently Zambia has two coal mines. The major one was once government owned and has a capacity of 1 million tons per year. However, despite the large reserves, the contribution of coal to total energy has been declining over the years due to the lack of capitalisation in the industry which resulted in production constraints at the main mine and also the reduced demand in the mining industry.

INSTITUTIONAL FRAMEWORK AND STORAGE AND TRANSPOTATION INFRASTRUCTURE OF THE ZAMBIAN PETROLEUM SUPPLY CHAIN

Country Background
Zambia is a landlocked country situated in Central Southern Africa (see figure 1 below) covering 732 614 square kilometres. It has a population of approximately 11 million with an annual growth rate of 3.5%.

The country is well endowed with natural resources including land, water, minerals,wildlife and energy resources among others. The major economic activity and source of revenue is mining (copper). Other sources of revenue include; cobalt, tobacco and non traditional exports such as flowers.

The preliminary estimate of economic growth in the year 2006 was 5.8% and was mainly driven by expansion in the mining, transport and construction sectors.The macro economic conditions have remained favourable and inflation was reduced to a
single digit at 9% in 2007 for the first time in three decades.

In terms of the energy sector, a significant growth in consumption iof petroleum products has been noted. For instance, the consumption of diesel has grown by at least 50% from an average of 900 m3 per day in 2006 to 1500 m3 in 2007. This
growth is mainly attributed to increased demand from mining.

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