Vitol Supplies Emergency Fuel to Zambia in IMF-Opposed Deal

Vitol Supplies Emergency Fuel to Zambia in IMF-Opposed Deal

Vitol Group is supplying diesel to Zambia via exclusive access to a pipeline that lasts through September, in an emergency arrangement the International Monetary Fund has urged authorities to end.

The government in April froze open access to the conduit that connects Zambia's copper-rich region to a port in neighboring Tanzania, saying it would ensure supply security, without identifying which company had taken over the operation. Speaking on the sidelines of a conference in Cape Town on Thursday, Ephraim Munshifwa, permanent secretary at Zambia's energy ministry, told Bloomberg that Vitol is now the sole provider via the Tazama pipeline.

In 2022, Zambia granted trading house Vitol and its local partner Agro-Fuel Investments a monopoly on the line, leading to calls from the IMF to allow open access. The government ultimately did so, which the Washington-based lender said halved the premium on fuel prices.

Then, after the Iran war upended oil markets, the open access system was again frozen this year, with Vitol getting exclusive use. The IMF last month said it had urged the Zambian government to restore the open access framework and publish the terms of the emergency arrangements.

Vitol declined to comment.

Land-locked Zambia produces no oil itself. The mining industry in Africa's second-biggest copper producer accounts for about one-third of total diesel demand. The Tazama pipeline covers about 60 percent of imports, with the rest coming by road.

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