All fuel to use Feruka pipeline
By Golden Sibanda
The government wants nearly 100 percent of bulk fuel imports into Zimbabwe to be transported using the Feruka Oil Pipeline to lower the cost of the key commodity and protect the country’s major roads from the destructive “pounding’ effect of tankers.
Secretary for Energy and Power Development Mr Patson Mbiriri said Government wanted to ensure that in the near future 99 percent of fuel imported into Zimbabwe was coming through the State pipeline to preserve the country’s major roads while only 1 percent should be trucks carrying Jet A1 fuel.
National Oil Infrastructure Company pumped 1,3 billion litres of fuel through the Feruka Oil Pipeline in 2016 compared to 1,53 billion litres in 2015, which represents a decline of 14,4 percent over a 12-month period with 104 million being exported into the region compared to 209 million in 2015.
Landlocked Zimbabwe uses about US$45 million to import fuel each month.
The Energy and Power Development secretary said Zimbabwe would only consider making provisions for bulk transportation of jet A1 to use the Feruka Oil Pipeline when the aviation industry in Zimbabwe grows to previous levels, which required much higher volumes.
The State-owned oil infrastructure company reduced the Feruka pipeline fees with effect from January 1 this year, as it sought to increase utilisation of the facility. When NOIC announced the plans last year it said that it would reduce the fees from 8,05 cents per litre to 6,5 cents per litre.
The oil infrastructure company moves its petroleum products into Zimbabwe through the Feruka pipeline and stores them at Msasa and Mabvuku in Harare for distribution to its other depots and customers.
NOIC vice chairperson Air Commodore Innocent Chiganze told The Sunday Mail Business that 90 percent of the country’s fuel imports were currently being imported using the Feruka pipeline while the balance was ferried by tankers.
“We are handling 90 percent and the balance is by trucks.”
Air Commodore Chiganze said NOIC was still evaluating the impact of reductions in pipeline fees meant to incentivise traders to use the pipeline instead of tankers, but affirmed his organisation’s belief that the predominant use of the Feruka pipeline would lower the cost of fuel in Zimbabwe.
Air Commodore Chiganze said apart from protecting major roads from the pounding effect of fuel tankers, using the pipeline for most bulk fuel transportation was critical in maintaining high fuel quality and ensuring the country was guaranteed a single fuel specification.
“There are different grades and qualities of fuel that can be imported, but if all the fuel comes through the pipeline, we are guaranteed one fuel specification,” Air Commodore Chiganze said after NOIC’s AGM. He would not give thresholds by which NOIC expects fuel prices to reduce on the back of increased usage of the pipeline.
“It also varies based on the international price, but we are saying for our own quarter, we should be able to bring down the price to regional standards, as you know fuel is cheaper in neighbouring countries,” he said.
According to recent statistics from the Zimbabwe Energy Council fuel is more expensive in Zimbabwe, compared to the rest of the region and in Zambia, a landlocked country too, unleaded fuel is reportedly currently selling for about $1, 11 per litre.
Petrol per litre was reportedly selling for $0, 95 cents in Angola, $0,74 cents in Botswana, 0,79 cents in Lesotho, $1,10 cents in Malawi, 0,95 cents in South Africa, 0, 91 cents in Swaziland and 1, 30 cents in Zambia. In Zimbabwe a litre of petrol retails for about $1,32.
Diesel was retailing for $0, 80 cents in Angola, $0, 70 cents in Botswana, $0, 81 cents in Lesotho, $1, 09 in Malawi and $1, 11 in Zambia. Comparatively, the same litre of diesel sells at $1, 18 per litre.
“We also realize that if the pipeline is used optimally, as we expect, it helps on other issues such as environment, road usage; as you know trucks have negative impact on roads, so there are many benefits,” he said. The Sunday Mail
