The upward price adjustment of liquid fuels will never end. There may be a few reductions here and there but the general trend will be upward for various reasons.
The often cited reason by the Energy Regulation Board (ERB) is currency fluctuation; the depreciation of the Zambian Kwacha against the US dollar.
For the sake of my notorious Tumbuka friend, this is not the only variable that can bring price adjustment.
The price of crude can increase due to market forces and trigger a pump price increase regardless of the state of one's currency.
It is a fact that the price of crude has gone up on the international market. Following the trend of the price movement on the international market, I knew that Zambia would suffer a heavy price increase in no time.
The question is for how long are we going to be dancing to geo-political happenings in the Middle East, market forces and the devaluation of our currency which is ecstatically celebrated by my friend in export business?
Currently, I must state that Iam pleased with policy statements around energy security for the country.
And by this I would like to see all political parties develop very sound energy policies. Energy policies which create incentives for those venturing in alternative sources are particularly welcome.
To this end, the pressure and mind set transformation must continue to build towards other sources of fuel.
Take for instance the case of South African integrated oil and gas giant company called Sasol.
This enviable company invested in technology and by 1955 it started making diesel from coal.
Today, this is the only company I know of in Africa with the technology of making diesel from coal. And now they have ventured even in China with the same technology.
Without the capacity of the South African government officials to see what Sasol proposed as a possibility, the concept of coal to liquid fuel (CTL) wouldn't have taken off.
It called for favourable policies, incentives and certain government guarantees for this project to take off.
This technology is two hours from Zambia.
Venturing in CTL technology will guarantee energy security both in the medium and long-term due to the wide availability of coal.
Zambia has got a lot of coal. If we can duplicate the stamina we are currently leveling in oil and gas exploration and look for a partner to bring CTL technology, we may start getting the best diesel in the world even before we harvest a single drop of diesel from oil explorations.
Other benefits of the CTL technology include more job creation, monetisation of stranded coal, preservation of forex, widening of economic activities, potential forex earnings by exporting to other countries since Zambia would not only have Indeni but also CTL technology; a mix which will produce enough for the other markets.
Bringing this technology is not like going to the sun, it can be done.
All what is needed is that petroleum ministerial committee sits and makes a recommendation to full cabinet to bring CTL technology.
They must look at available technology, costs, benefits and impact.
We have a lot of stranded coal in the country, some of it waiting to be discovered.
The low price of coal compared to the ever increasing price of crude oil provides a degree of longer term investment certainty.
In any case regular readers of my article know what will start happening around 2025-2030 with regard to crude oil availability on the global market.
Further, it is cheaper to import coal for converting to Liquid fuel compared to importing crude in case you need supplementary stocks.
It must be noted that Liquid fuels from coal can be delivered from an existing pump at a filling station via existing distribution infrastructure without modification and can be used in current fleet of vehicles in Zambia without engine modification.
Coal, including waste or low quality coal can readily be converted into a variety of fuels with key advantages:
Coal-derived fuels are ultra clean: sulphur free, low in particulates with low levels of oxides of nitrogen. This must please my colleagues at ECZ
Longer engine life span
Coal is mined in over 50 countries worldwide and present in over 70 countries.
Estimates of global tonnage and usage at the moment reveal that coal stocks may last some 100 years from now by which time the story of crude oil may be too completed to rely on.
With current plant configurations, it is possible to reduce carbon dioxide emissions by more than 20 per cent compared to 20th century technology.
Lower fuel prices and stability
Finger-pointing will not solve the ever escalating fuel price.
What is needed is to operationalise policies deeply, strongly and resolve and commit to partner with people with technology in pursuing alternatives.
When it came to the mines, we bent real steep to solve the challenge at that time.
We can bend once again and bring technology to help mitigate the high fuel prices.
The author is a Petrochemical Consultant
Johannesburg, South Africa
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