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The Department is responsible for the development and management of the petroleum sub-sector so as to ensure the security of supply of petroleum products.
Specific Functions
In pursuing its purpose, the department carries out the following functions;
Departmental Structure
The department is organized into two units namely;
i) Petroleum Supply Unit and
ii) Petroleum Management Unit
Zambia is a land linked country whose fuel source and imports is dependent on importation from other countries. Due to increased industrialization in mining, agriculture, manufacturing and population, demand has been steadily increasing in recent year, indicating the country’s economic expansion.
Government in December, 2021 disengaged from procuring commingled feedstock and allowed the private sector (OMCs) to import finished petroleum products. Low Sulphur Gasoil (LSGO), 80 percent of the product is delivered via the TAZAMA Pipeline through an open and competitive tendering system-the TAZAMA Open Access Framework which was implemented in April, 2025. The remaining 20 percent is delivered by road by the OMCs. In addition, petrol, Jet A1 and Kerosene imports are 100 percent delivered by road by OMCs.
Fuel Supply Options
Finished petroleum products are imported from Tanzania, Mozambique, or South Africa and transported by road tankers to government-owned fuel depots for distribution throughout the country. The supply chain of finished petroleum products is through road tanker and via the TAZAMA Pipeline.
Refinery Mode
In April 2026, Zambia launched the Petrochemical Energy Company (ZPEC) Crude Oil Refinery in Ndola. The project is a joint venture between the Zambia Industrial Corporation (IDC) and China’s Fujian Xiang Xin Corporation estimated at USD 1.1bn. multi-million state of the Art Crude Oil Refinery to be situated in Ndola. The project is expected to process 3.0 million MT per annum or 60,000 barrels per day. The project is anticipated to produce petrol, LSGO, Jet A1 and Kerosene. Other by-products include LPG, HFO and bitumen. As Zambia aspires to become a regional fuel hub, the project has the potential to stimulate the country’s growth and be able to cushion the current domestic fuel demand as well as supply nearby regions.
Petroleum Products Pricing
The pricing of petroleum products in Zambia continues to be influenced by international oil prices and the exchange rate of the Zambian Kwacha to the United States Dollar.
Model of Pricing
The Ministry through the Energy Regulation Board (ERB), implements monthly review of fuel prices for petroleum products using the Import Parity Model. These reviews are conducted in accordance with the government’s reform programme for the petroleum sector, aimed at ensuring that pump prices are responsive to exchange rates and global oil prices.
Determinants of Petroleum Pricing
The price of fuel in Zambia is mainly influenced by international oil prices and the exchange rate of the Zambian Kwacha to the United States Dollar. Any movements in the two (2) factors could trigger a price adjustment. Other factors that could initiate a price adjustment are changes in levies and duties, margins for transporters, OMCs or dealers and adjustments in pumping or processing fees.
Financing of Procurement Petroleum Products
All petroleum product imports are financed by the private sector.
Uniform Petroleum Pricing Mechanism
The Uniform Petroleum Pricing (UPP) programme has been implemented since August, 2010, to establish uniform prices for all petroleum products regardless of location. This programme operates using a transport cross-subsidy system, where OMCs outside a specified radius from the Government Depot can claim from the Fund, while those within the radius contribute to it. The UPP programme has stimulated fuel consumption in rural areas, ensured a steady nationwide supply of petroleum products, and boosted economic growth.
The Ministry developed guidelines for the implementation of the UPP mechanism for the Zambian Petroleum Sub-sector to ensure uniformity and stability of fuel pump price across the country as well as ensuring a steady and secure supply of petroleum products. The guidelines also stipulate the roles of each stakeholder, the Ministry, the ERB and OMCs.
The Strategic Reserve Fund
The Strategic Reserve Fund has been renamed as the Energy Fund. The Energy Regulation Act No.12 of 2019 establishes the Energy Fund for the purposes of ensuring stability of supply in the energy sector. The Fund is used to stabilize the price of petroleum products and importation of strategic reserves and its primary purpose is to support energy sector development and address emergencies in the sector.
Bio-Fuels
In order to augment the petroleum supply, government is promoting the use of bio-fuels in the transport sector to reduce dependency on fossil fuels and oblige with international Climate Change protocols.
Construction of the New TAZAMA Multi-Product Pipeline:
In order to meet future demand for petroleum products in Zambia and Tanzania, a new finished product pipeline with a capacity of Seven Million Metric Tonnes Per Annum (7MTPA) is planned to be constructed.
The Namibia-Zambia Oil Pipeline (NAZOP):
An MoU was signed in October, 2022 and project’s status is at pre-feasibility study.
The Mozambique-Zambia Oil Pipeline (MOZAM):
The Government of the Republic of Zambia and Government of the Republic of Zimbabwe signed an inter-governmental Memorandum of Understanding in March, 2016 for the development of the energy projects (petroleum and interconnectors). An MoU was signed in May, 2025 to plan and develop a pipeline from Beira, Mozambique to Ndola, Zambia.
The Angola Zambia Oil and Gas Pipeline (AZOP):
Construction of the Zambia-Angola Oil and Natural Gas Pipeline (AZOP). proposal was submitted to the Ministry of Energy in 2010 and over 10 years of negotiations have led to the inter-Governmental Memorandum of Understanding being signed on 29th April, 2021 between the Government of the Republic of Zambia and the Government of the Republic of the Republic of Angola via the respective ministries responsible. In line with international best practice for risk mitigation, the project proponents, Basali Ba Liseli (BBLR) included the ‘Walvis Bay to Lusaka base case route option” to the initial ‘Lobito Bay to Lusaka corridor” that was proposed initially for the project.
Regulatory Frameworks
Legal Instruments are in place to govern the sub-sector. These include;
i) The Petroleum Pricing Framework (SI No.77 of 2024).
ii) The Citizens Economic Empowerment (Transport of Heavy and Bulk Commodities by road) SI No.35 of 2021.
iii) The ERB Act No.12 of 2019.
iv) The Petroleum Act Cap 435 (Act No.28 of 1930).