Zambia plans to reinstate open access to the Tazama oil pipeline by January, marking the end of an emergency arrangement that gave Vitol Group exclusive rights to transport diesel. This move comes after the International Monetary Fund (IMF) urged Zambian authorities to conclude the exclusive deal, which had been put in place to ensure supply security during a period of global oil market disruptions.
The government initially froze open access to the pipeline in April, citing the need for stable fuel deliveries following the conflict involving Iran and its impact on international oil markets. Vitol Group was named the sole provider via the Tazama pipeline, which covers approximately 60% of Zambia's diesel imports. The IMF had previously highlighted that open access to the pipeline in 2022 had halved the premium on fuel prices, and its suspension led to concerns about rising costs for consumers and industries.
The Tazama pipeline is a crucial piece of infrastructure for land-locked Zambia, which produces no oil itself. The mining sector, a significant part of the country's economy and Africa's second-biggest copper producer, accounts for about one-third of total diesel demand and is heavily reliant on uninterrupted fuel supplies. The emergency measure, which was approved by the Cabinet for six months from April to September 2026, aimed to prevent shortages and sustain economic activity during a volatile period.
The restoration of open access is expected to bring back competition among importers, which the IMF argues will help reduce fuel import premiums. The government's decision to suspend open access was described as a short-term measure to address immediate supply vulnerabilities. Officials had also indicated that the arrangement would be reviewed after September, with the aim of modernizing infrastructure and increasing throughput capacity from 1.1 million metric tonnes to 4 million metric tonnes annually as part of a larger Tanzania-Zambia Multi-Product Petroleum Pipeline project.
