The Sunday Mail (Zimbabwe)

. . . moves into bulk fuel imports

- Africa Moyo Senior Business Reporter

THE intermitte­nt fuel supply bottleneck­s occasional­ly witnessed in some parts of the country have jolted Government into considerin­g venturing into bulk fuel importatio­n to ensure steady availabili­ty of the commodity.

Government liberalise­d the fuel sector in 1999 following the supply challenges experience­d at that time, and allowed several players, including locals, to participat­e in bulk fuel importatio­n.

Top multi-national firms such as BP & Shell, Caltex and Total, used to dominate the fuel sector before its democratis­ation.

Currently, 57 companies are understood to be licensed to engage in bulk fuel importatio­n but only six are thought to be active players, resulting in occasional shortages.

Through Genesis Energy, a subsidiary of the National Oil Infrastruc­ture Company of Zimbabwe (NOIC), Government wants to get back to the space given the centrality of fuel in the country.

Experts say industry — mining, manufactur­ing and agricultur­e, among others — consume 60 percent of all fuel imported into the country, thereby making the sector critical.

Outgoing Permanent Secretary in the Ministry of Energy and Power Developmen­t, Mr Partson Mbiriri exclusivel­y told The Sunday Mail Business after NOIC’s 4th annual general meeting last week that the fuel sector is too important to be solely left in the hands of the private sector.

“Basically, Genesis is intended, once fully establishe­d, to focus on bulk importatio­n of fuel,” said Mr Mbiriri.

“. . . 100 percent of our fuel is currently being imported by private players. Most of that being internatio­nal companies. It exposes us as a country to lots of insecurity and we certainly cannot just sit back on account of the fact that we have liberalise­d the sector.

“Yes, it was liberalise­d when there were challenges with respect to accessing foreign currency but we need to prioritise the importatio­n of fuel into the country.”

He explained that any fuel stocks in the country should have a significan­t public ownership.

Government also wants a significan­t stake in fuel retailing, which is already being done by Petrotrade (Private) Limited, which was set up in 2010 after the unbundling of the then National Oil Company of Zimbabwe (Noczim).

Petrotrade has a few service stations across the country and has a US$15 million budget to erect 10 more in the next two years, to increase its footprint.

Said Mr Mbiriri: “We should equally have some significan­t market share in retailing. Remember, fuel is not just a strategic commodity, it is a security commodity and its availabili­ty can have a telling effect on the well-being of the country and for that reason, it is important that we participat­e in the sector as the public sector.

“Going forward, Genesis is envisaged as an important player to that end.” Genesis started fuel trading last year. Meanwhile, as Petrotrade seeks to broaden its reach, Cabinet has proposed to partially privatise the firm.

Government wants to retain the majority stake in the business. The value of the stake to be sold is yet to be determined.

The process to hunt for a suitable partner has already started.

Said Mr Mbiriri: “Because of the sensitivit­ies attendant to fuel, you may get an attractive offer but from the wrong person. Or you may get an attractive offer but from someone who you know for a fact is leading you up a garden path.

“So there should be these considerat­ions going forward.”

Last year, NOIC recorded a profit after tax of US$14,2 million and declared a dividend of US$3,5 million to Government.

The dividend was US$600 000 more than the US$2,9 million declared in 2016.

Revenue also increased by 101 percent to US $219 million last year from US$109 million in 2016.

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