Zambia Moves to Modernise Its Petroleum Legislation
In early September 2025, Zambia’s Ministry of Energy appeared before the Parliamentary Committee on Parastatals, chaired by Shiwang’andu MP Stephen Kampyongo, to defend the need for a new petroleum law. The proposed legislation seeks to repeal and replace the Petroleum Act No. 28 of 1930, a statute that has governed the sector for nearly a century.
Background of the Existing Petroleum Law
The 1930 Petroleum Act was enacted during the colonial era and primarily focused on the licensing and taxation of fuel imports. Over the decades, Zambia’s energy landscape has transformed dramatically:
- Annual petroleum product consumption rose from roughly 150 million litres in the 1990s to over 600 million litres in 2023, according to the Ministry of Energy’s Annual Energy Statistics.
- The country now imports refined gasoline, diesel, jet fuel and liquefied petroleum gas (LPG) from regional refineries in South Africa, Mozambique and Tanzania.
- Domestic storage capacity has expanded to more than 1.2 million cubic metres, yet regulatory oversight remains fragmented across multiple agencies.
These developments have exposed gaps in the current law, particularly regarding supply security, pricing transparency, and environmental safeguards.
Key Objectives of the Proposed Bill
Acting Permanent Secretary Grace Tonga outlined the bill’s core aims during the committee hearing:
- Repeal and replace the outdated Petroleum Act No. 28 of 1930 with a comprehensive statute covering importation, exportation, transport, distribution, retailing, wholesale marketing and storage of petroleum products.
- Establish a Uniform Petroleum Pricing Fund designed to stabilise domestic fuel prices by pooling price‑differential revenues and smoothing international market volatility.
- Introduce clear licensing procedures, technical standards, and monitoring mechanisms that align with international best practices such as the African Petroleum Producers’ Association (APPA) guidelines and the International Energy Agency’s (IEA) downstream regulations.
- Strengthen sector governance by clarifying the mandates of the Ministry of Energy and the Energy Regulatory Board (ERB), thereby reducing duplication of effort.
- Enhance transparency through mandatory reporting of import volumes, storage levels and retail prices, and by requiring public consultation on major pricing adjustments.
Ms. Tonga emphasized that the reforms would promote efficiency, attract investment, and support Zambia’s broader goals of energy security and sustainable development under the Seventh National Development Plan (2022‑2026).
Parliamentary Scrutiny and Recommendations
Committee Chairman Stephen Kampyongo welcomed the ministry’s presentation but urged further refinement:
- He called for explicit language that harmonises the roles of the Ministry of Energy and the ERB to avoid overlapping responsibilities in licensing, compliance monitoring and enforcement.
- Members of the committee requested a detailed impact assessment on small‑scale retailers, noting that uniform pricing mechanisms could affect profit margins in rural areas.
- Several legislators advocated for the inclusion of environmental safeguards, such as mandatory leak‑detection systems for storage facilities and penalties for illicit fuel smuggling.
The committee resolved to submit a set of amendments to the Ministry of Energy by mid‑October, after which the bill will proceed to a second reading in the National Assembly.
Implications for Industry Stakeholders
Industry analysts anticipate several immediate effects if the bill is enacted in its current form:
- Price stability: The Uniform Petroleum Pricing Fund could reduce the frequency of abrupt fuel price adjustments, benefiting consumers and transport operators.
- Regulatory clarity: Consolidated oversight may lower compliance costs for multinational oil traders operating in Zambia.
- Investment incentive: Transparent licensing and predictable pricing are likely to encourage new entrants in downstream logistics and retail.
- Operational upgrades: Storage operators may need to invest in modern monitoring equipment to meet the bill’s technical standards.
Conversely, small independent retailers have voiced concerns that a uniform pricing mechanism could limit their ability to compete on price in remote markets. The Ministry has indicated that a transitional support scheme—potentially involving targeted subsidies or tax relief—will be examined during the committee’s deliberations.
Next Steps and Outlook
The parliamentary review process is expected to conclude by the end of Q4 2025. Should the bill receive presidential assent, Zambia would join a growing number of African nations—including Ghana, Kenya and Uganda—that have overhauled their petroleum frameworks to reflect 21st‑century market realities.
For citizens, the promise of more predictable fuel prices and a cleaner, safer supply chain aligns with the government’s broader agenda of economic diversification and poverty reduction. Stakeholders will be watching closely as the legislative text evolves, particularly the final provisions governing the Uniform Petroleum Pricing Fund and the division of duties between the Ministry of Energy and the Energy Regulatory Board.
