NOIC anticipates drop in oil pipeline fees

THE National Oil and Infrastructure Company of Zimbabwe says it anticipates a marked increase in the usage of the Feruka oil pipeline in the second quarter of the year following the reduction in pipeline fees implemented in January this year.

In an interview on the sidelines of the company’s ISO 9001: 2008 award ceremony in Harare last week, board chairman and Inpetro board member Dr Jimias Madzingira said: “We noticed a decline in the usage of pipeline and after that we engaged consultancy who came up with the conclusion that road transport had become popular because it was cheaper than the pipeline, hence recommendations to reduce our prices, which we have since done. As such we expect a visible increase in the usage of the pipeline around May-June,” he said.

The fees were reduced from 8,05 cents per litre to 6,50 cents per litre. The company is on record saying it was targeting an end to bulk transportation of imported fuel by road and rail, as this will help preserve the country’s infrastructure, if nearly 100 percent of fuel imports came through the pipeline.

Dr Madzingira also told The Herald Business that “the reduction of fees that we have implemented should see the eventual phasing out of the use of haul- age trucks. We have had some internal restructuring at NOIC that has seen the growth of the marketing department with the mandate to see the usage of the pipeline increasing with an eye towards phasing out transportation by road and rail,” he said.

He also pointed out that plans to increase capacity at Feruka are still in progress. The NOIC chairman said once the company secures relevant approvals, it would begin capacity extension since the all requisite funding was available. The upgrade would involve installation of additional booster pumps which would result in the flow of fuel increasing to 225 million litres from the 180 million litres per month.