Coal-to-fuel giant Sasol is reportedly among the foreign companies vying to acquire a majority stake in Zambia's state-owned Indeni Petroleum Refinery.

India's Essar Group is said to be a competing bidder.

According to the Wall Street Journal, Indian website livemint.com and Zambian independent newspaper The Post, Esaar wanted to use the refinery, one of the few inland refineries in Africa, to supply petroleum products to the Democratic Republic of Congo, Malawi, Zambia and even East Angola.

"The Zambian government has to take a decision whether they want to divest the refinery along with the 1300km Tazama pipeline that brings crude from Dar es Salaam port in Tanzania," The Post quoted an unnamed source as saying.

Zambia's government last year became the 100 percent owner of the Indeni Petroleum Refinery after French Oil giant Total Fina Elf dumped its 50 percent shareholding.

The Zambian newspaper said that the firm that wins the bid for the refinery would have to invest around $100 million for refurbishing and augmenting refining capacity as its current configuration allows separation of only diesel and liquefied petroleum gas.

Zambia's government is expected to take a decision on the stake sale by March this year.

At 09:56 on Tuesday, shares in Sasol were trading R2.70 lower at R315.30 on the JSE.