Zambian officials appear unfamiliar with the workings of letters of credit (L/Cs) as fuel trucks remain unable to offload fuel at the country's Tazama pipeline terminal.

Some 400 tankers carrying fuel from East Africa are reportedly marooned at the terminal because L/Cs required from Zambia's Ministry of Mines, Energy and Water Development have not yet been delivered to the supplier, Trafigura (DC World News, 22 April 2013).

Extremely disappointed

Energy permanent secretary, George Zulu, has now reportedly told local media that the Dutch commodity trader should have informed the authorities before refusing to offload fuel.

Zulu says he is "extremely disappointed with Trafigura. We have been doing business [with them] for a long time now and as government we don't owe them any money. We always pay them but I am disappointed with the mistrust," he said.

"Trafigura wanted an L/C before they could allow the fuel to be offloaded. We told them that we will send the L/C, but they wanted to see it with their own eyes. The banks are the ones that delayed the L/C," he told reporters at a press conference.

New contract

Zambia's contract with Trafigura ends in August 2013, and the Dutch commodity trader is eligible to compete for a new term.

But Zulu says the authorities want to "sign solid contracts with companies and explain to them about the challenges we can encounter at contract level."

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.