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Mozambique’s Government Revokes Concession for the Mozambique-Zimbabwe Fuel Pipeline

Mozambique’s Council of Ministers has decided that the Mozambique-Zimbabwe Pipeline Company [CPMZ] is no longer the concessionaire of the Beira-Zimbabwe pipeline, which has been continuously in operation for over 41 years (since 1982).

The Council of Ministers, effectively the cabinet, “approved the Decree which revokes Decree 1/84 of 22 February, which grants the Beira – Zimbabwe fuel pipeline exploitation project,”  according to Filimão Suazi, spokesperson for the Cabinet meeting.

“The Decree revokes the concession to the Companhia do Pipeline Moçambique -Zimbabwe [CPMZ] for the exploitation of the Beira – Zimbabwe fuel pipeline and respective benefits: allowing the stability of ongoing investments, it  attributes powers to the ministers who oversee the areas of Finance, Mineral Resources and Energy and of Transports and Communications to approve the necessary mechanisms to ensure the continuity of the exploitation of the Beira – Zimbabwe fuel pipeline, without prejudice to the competences of other bodies,” he added.

CPMZ had operated the Mozambique- Zimbabwe pipeline from the Mozambican coastal city of Beira to Feruka in Mutare, in Zimbabwe.

Zimbabwe’s National Oil and Infrastructure Company (NOIC), meanwhile,  operates the Feruka Pipeline from Mutare to Mabvuku or Msasa depots in Harare.

The CPMZ-Feruka pipeline transports 90% of fuel into Zimbabwe while the balance of the fuel is imported by road.


South Africa’s Transnet Keeps Pipeline Theft Down, Raises Profits

By Toyin Akinosho, Publisher

Transnet, the South African state-owned logistics company says the annual revenue of its Pipelines unit was 7% above budget and operating expenditure was maintained well below the budget, resulting in EBITDA being 27% above budget in the 2023 financial year.

Transnet’s Pipeline Unit, simply called ‘Pipelines’, operates and maintains a 3,114 kilometre high-pressure petroleum and gas pipeline network in South Africa. The flagship infrastructure of that network includes the 715 kilometre long, multiproduct pipeline (MPP) to transport petrol, diesel and jet fuel from Durban to Gauteng as well as the 600 kilometre, 16-inch Secunda–Durban natural gas pipeline.

“Pipelines made significant progress in reducing fuel theft incidents in 2023. Pipelines achieved an 8.6% reduction in product loss due to theft incidents in 2023, when compared to the prior year, despite the number of fuel theft incidents increasing in 2023”, the company explains.

Transnet then claims that “the implementation of long-term holistic, sustainable solutions as well as ongoing engagements with all stakeholders to curb the number of incidents yielded positive results as fuel theft incidents reduced by 63% in the second half of the year when compared to the first six months”.

The targeted volume and actual deliveries for the 2023 financial year include:

–Targeted Total Petroleum volume: 15 432Million litres; Achieved volume:  15,500Million litres.

– Targeted Natural gas volume: 533Million cubic metres (or ~18.8Billion cubic feet) ; Achieved volume:  516Million cubic metres (or ~18.2Billion cubic feet).

Transnet Pipelines considers product theft along its pipelines as one of the company’s top risks, as, the company says:

  • It has adverse impact on Pipelines’ reputation and brand due to negative media coverage associated with the theft of product incidents
  • Loss of volumes as a result of product theft negatively impacts volume and revenue objectives

The product theft incidents caused interruptions on the pipeline operations, however, Pipelines continued to ensure security of fuel supply to the inland market.

The company also considers, as a high risk, the failure of certain parts of the Durban-Johannesburg Pipeline (Sasolburg to Kroonstad and Alrode to OR Tambo International Airport) due to inherent defects in the line.

Transnet expects to continue to implement the Pipeline Security Strategy to ensure safe operations and minimise the impact of fuel theft on the operational and financial performances.

It also wants to “fast-track the environmental remediation backlog to comply with relevant and applicable environmental legislation while maintaining organisational sustainability”.


AFC Bets Big in Ugandan Petroleum Product Transportation

The Mahathi Infra investment will eliminate approximately 100,000 truck journeys, annually, on East Africa’s busiest transport route – from Kisumu, Kenya, to Kampala, Uganda.

Africa Finance Corporation (AFC), has invested close to a hundred million dollars in Mahathi Infra Uganda Limited, one of East Africa’s largest oil and gas downstream players.

The financier’s $95.25Million investment will finance the construction of two self-propelled barges for operation on Lake Victoria, providing a more efficient and less carbon intensive alternative to traditional trucking, AFC says in a release. “The financing will also support enabling infrastructure including 14 petroleum storage tanks, 20 truck loading bays, a jetty, and a parking lot with a capacity of 50 trucks, thereby transforming petroleum product transportation in Uganda and significantly reducing cost, transport time, and carbon emissions.

Uganda is a net importer of petroleum products, primarily through the Mombasa Port in Kenya.

“As such, the project will have a significant impact on the country’s economy with a single barge trip on Lake Victoria replacing 200 trucks on the road. Annually, AFC’s investment will eliminate approximately 100,000 truck journeys on East Africa’s busiest transport route – from Kisumu, Kenya, to Kampala, Uganda.

“This reduction in road traffic will ease congestion and minimize issues such as product adulteration, theft, and accidents. It will also alleviate working capital burdens for small and medium-sized distributors, enabling them to procure products directly from the Mahathi storage facility, reducing delivery time from seven days to immediate access” the release explains.

“The self-propelled barges are designed in accordance with international Environmental & Safety standards to prevent fuel leakage. They will decrease greenhouse gas emissions by over 95%, from 172,103 tonnes to 7,692 tonnes of CO2, annually on the basis that one self-propelled barge has the equivalent storage capacity of 200 trucks and a significantly shorter travel distance over Lake Victoria of about 250kilometres compared with the 350kilometre road route.

“Upon completion, Mahathi’s workforce is estimated to increase from 22 to 100 employees, 30% of whom will be women. The project’s impact extends beyond Uganda, serving as a foundation for future expansions into other landlocked countries near Lake Victoria”.


Prudent Energy, 55 Others Get Licenses to Import Gasoline into Nigeria

By Fasilat Oluwuyi, Energy Access Reporter,  AOGR

Farouk Ahmed, Chief Executive Officer, Nigeria Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), has disclosed that a total of 56 marketing companies have now gotten the license to import fuel in Nigeria.

Ahmed listed Prudent Energy, AYM Shafa and Emadeb as the three companies currently importing PMS, adding that others will commence importation between August and September 2023.

The NMDPRA head, who was fielding questions by reporters, reiterated that government no longer determines the price of Gasoline (PMS) in Nigeria, but the market.

The subsidy on PMS in the country formally ended on May 29, 2023, the inauguration date of president Bola Tinubu. The deregulation of the market took off on that date.

Ahmed explained that 10 of the 56 companies licenced to import PMS have indicated to supply within the third quarter which is July, August and September. “And out of those, we already received some cargoes from some of these Marketers”.

“Ahmed pointed out  that the fact that cargoes of PMS imported by  Prudent Energy, AYM Shafa and Emadeb, arrived on July 19, 2023, was an “encouraging sign that the market is liberated and everyone is free to import so long as you are working within the framework especially in terms of quality.”

Mele Kyari, NNPCL’s Group Chief Executive Officer,who was at the interactive session with reporters, said the upward rise in prices of PMS in the last six weeks of the deregulation has nothing to do with supply of PMS.

”There is no supply issue”, Kyari explained. “When you go to the market you buy the product, you come to the market and sell it at prevailing market price. There is nothing to do with supply, we don’t have supply issues.

”What I know is that the market forces will regulate the market, prices will go down sometimes and sometimes, it will go up but there will be stability of supply” he said

 

 


Angola, Nigeria Wind Down Fuel Subsidies, as Kenyans Brace for VAT Increases on Petrol

By Macson Obojemuinmoin

Angola’s increase in the price of gasoline at its filling stations by 88% is the farthest it has gone, in five years, to move the needle on fuel subsidy reduction.

On June 2, 2023, a litre of gasoline shot up from 160Kwanza to 300Kwanza, an 88% jump.

The government says that measures to mitigate the effect of the price increase will be implemented for some priority sectors and “highly vulnerable classes”. The subsidy (meaning former low prices) will remain for  the agricultural  and fishing sectors, some public companies like the Public Electricity Production Company ( PRODEL) as well as Taxi Drivers, Bus Drivers and goods laden Trucks.

The country has determined that subsidies on petroleum products, valued at close to $3.6Billion in 2022, will go, but it doesn’t want to take off the subsidy in one fell swoop.

The story is different in Nigeria, where gasoline subsidy ended on May 29, 2023,  the day of the coronation of Bola Ahmed Tinubu as the country’s 16th President. Subsidies for other products had long gone. The new gasoline prices, of between 488Naira  in Lagos and 570 Naira in Borno, in the country’s far northeast,  are about 186% higher than the subsidized prices which became extinct on Mr. Tinubu’s inauguration day.

Kenya’s gasoline and diesel prices are deregulated, but President William Ruto is determined that a large increase in taxes is the way to fund the building of critical infrastructure. The Finance Bill submitted in mid May 2023 to Parliament is expected to  double VAT on petroleum products to 16%, pushing up prices of a litre of gasoline by Sh13.51 to Sh196.21, while diesel will increase by Sh12.40 to Sh180.88, at current crude oil prices.

Fuller details are published in the May 2023 edition of the Africa Oil+Gas Report

 

 


Russia Will Help Mozambique to Stabilize Fuel Prices

Russia has said it was open to working with Mozambique to reduce, by half, the cost of petroleum products in the country’s filling stations.

Alexander Surikov. Russian Ambassador to Mozambique, said his country would “allow Mozambique to start importing fuel directly from Russia, avoiding intermediaries, potentially reducing by at least half the costs of acquiring the products”.

Russia is wooing friends all over the world as the European Union imposes sanctions on it in the wake of its invasion of Ukraine, which has pushed up crude oil prices and exacerbated global supply change challenges. Africa has become a key site in the contest of will between Russia and the west.

″Russia is open to working with Mozambique in this regard”, Surikov declared at a consultation meeting with the Confederation of Economic Associations of Mozambique (CTA), “We are open to projects in the fuel sector and in others of mutual interest.” he said.

Mozambique has had to deal with skyrocketing prices of petroleum products. The Mozambican Energy Regulatory Authority (Arene) announced the third fuel price rise in 2022 on July 1.

The sharpest rise was for LPG cooking gas for which a kilo of gas leaped by 19.28% from 85.53 meticais to 102.02 meticais; the price of a litre of diesel rose by 11.4% from 78.97 to 87.97 meticais. For gasoline the increase was 4.4%, from 83.3 to 86.97 meticais a litre. This is the first time that diesel has become more expensive than petrol at Mozambican filling stations.

The price of a litre of kerosene rose from 71.48 to 75.58 meticais, which is an increase of 5.74%.


NNPC Approves Aramco’s Bid to Challenge Dangote Refinery

Saudi Aramco is mulling investment in Nigeria, says NNPC, the country’s state hydrocarbon company and the most influential entity in the West African oil patch.

NNPC is keen on having Saudi Aramco invest in the Nigerian midstream, but the important part of the story is that the Saudi state firm wants to use NNPC as a platform to supply West Africa with gasoline, says Mele Kyari, the NNPC chief executive.

And the NNPC, surprisingly, doesn’t mind. The two parties are holding talks on potential cooperation.
Teams from NNPC and ADNOC, which is the UAE’s state hydrocarbon firm, have also met in Abu Dhabi to discuss investment opportunities that could range from upstream to midstream to downstream, Kyari told reporters at a recent industry event in Fujairah in the UAE.

Mr. Kyari doesn’t see a problem with the Nigerian state owned oil firm, having an agreement with a Saudi Oil Company to supply gasoline into West Africa, at the time a Nigerian owned business entity is at a significant stage of construction of a large refinery, to produce gasoline and other products, with focus on the West African market. The Dangote Refinery, the largest single train in the world, will cost between 9 and 11 Billion US Dollars, according to estimates.  Instead, the NNPC CEO gushes:  “Aramco is quite keen on getting the opportunity to supply gasoline to West Africa and we will provide them with the right platform.” Mr. Kyari also adds: “We are the largest importer of gasoline in West Africa. It is a clear opportunity for them.”


Gasoline, Diesel Prices, Keep Going Up in South Africa

Petrol prices, which have increased by almost 15% in South Africa since January this year, look set to increase further in October 2019.

The country’s fuel price is deregulated, which means a hike in crude oil price and a weakening of the local currency, the Rand, directly push prices up.

Those two have happened so far in September 2019, leading to warnings by regulators of an imminent hike of diesel and gasoline prices.

After an initial spike of 20% to above $70 a barrel, the oil price has since retreated, with Brent crude oil currently trading at $63 – compared to $60 before the attack. Saudi output was restored in the week of September 23, to pre-attack levels.

The Rand took a hit amid concerns about a global trade war and broke through the R15/$ level for the first time in three weeks. It was last trading at R15.03.

Based on the latest calculations of the Central Energy Fund, the biggest parastatal in the Department of Energy (DoE) the recent Rand and oil price movements will leave unleaded 95 octane petrol on track for an increase of 19c a litre, while 93 octane petrol could be cut by around 4c. Diesel prices will increase by 24c, and paraffin by the same margin.

 

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