A measured approach to downstream diversification in Angola

Angola

Ivanilson Machado, general manager of Pumangol, talks to The Energy Year about how the company is navigating increasing competitiveness in Angola’s downstream sector, its ongoing retail expansion and the growth of the natural gas market. Sonangol-owned Pumangol is a downstream company active in petroleum product retail, storage and management.

How is Pumangol navigating Angola’s increasingly competitive downstream sector?
Our strategy is very clear: We want to grow with sustainability. We’re focusing on deliberate, strategic expansion, especially in retail. At present, we have 83 service stations across 19 provinces of the country. However, given Angola’s centralised import system, we must take a cautious approach to our growth plans. Expansion is not merely about opening more stations; it is about ensuring a reliable supply.
We target two to four new stations per year, but each one must be highly strategic. Although we have plots and opportunities for acquisition, managing supply at existing stations remains a challenge. Until Angola adopts a more liberalised model, such as the one in Mozambique, where each player imports their own fuel, we remain dependent on Sonangol for supply.
Retail remains the public face of our business, but diversification is key. We are investing in gas, developing our own brand of lubricants called Maxlub and representing Kroon-Oil. We continue to grow our aviation fuel business and are preparing to operate at the new Luanda airport.

In our previous interview, you mentioned a USD 12-million investment for retail expansion. Which areas are you targeting with this investment?
Our main focus is Luanda. While we already have a significant footprint, we hadn’t been expanding into the city centre in recent years. That has now changed. We’ve opened one new station in the centre and plan to open two more.
In the provinces, our coverage is currently sufficient. Opening more stations outside Luanda would pose a risk without guaranteed product availability at local terminals. In Luanda, however, we have a better handle on logistics. Our terminal is the most active in the country, since Barra do Dande is operational but not yet in use.
Our investment isn’t solely for new builds. We also allocate funds to refurbish existing stations and maintain our high standards. Many of our stations are over a decade old, but continuous upgrades ensure they remain modern and efficient.

Are there plans to expand your storage infrastructure?
Not immediately. Our terminal in Luanda already has sufficient capacity for Angola’s consumption. With the opening of Barra do Dande, we expect some storage volumes to shift, particularly those handled by Sonangol.
Our strategy is to optimise existing infrastructure. Drawing from experience in Mozambique, where storage is a business in itself, we see opportunities for Angola to become a regional hub. We are already in talks with international traders to use our facilities in Luanda and Lobito for transit storage to neighbouring countries.
If this model proves successful, we could expand storage in Luanda, Lobito or Malanje, where space exists for additional tanks. However, first we must validate the transit storage model and build Angola’s position as a logistics hub.

With refining capacity expanding in Angola, is Pumangol looking to enter the refining segment?
Refining is not part of our current strategy. Though we are well informed of national refining projects through our shareholder Sonangol and hold weekly co-ordination meetings, our attention remains focused on the downstream sector.
Our priorities include accelerating our gas business, scaling our Maxlub brand and expanding our SPAR Express model beyond Luanda. Once our rollout in the capital is complete, we plan to replicate the same standards in provincial locations.
On the B2B front, we recently secured a major lubricants contract with Catoca Mining Society, a key milestone. We’re now looking to offer bundled fuel and lubricant contracts, especially for the mining sector, though fuel-supply constraints remain a challenge.

Has the reduction in subsidies and price adjustments improved business conditions?
Yes, and it has been a welcome change. After many years with no price changes, we are finally seeing gradual movement. Price adjustments in the last two years have marginally improved profitability.
This shift has helped us continue investing in the business. We’re able to revamp stations, launch new product lines and keep morale high. Maintaining standards with limited margins is tough, but we’ve succeeded thanks to a strong management strategy.
We’re sticking to our five-year plan. The gas strategy is being implemented, the new lubricant brand has launched, and retail expansion is ongoing. The environment now supports these investments.

How is Pumangol preparing to participate in the gas market, including in CNG and LPG?
Gas is a key area of growth. One of our major priorities is to regain control over our logistics chain by reintegrating transport operations. We used to manage Transfuel, and since moving away from it, we’ve seen reduced efficiency. We now plan to bring a transport company back under our umbrella.
We’re also conducting cost comparisons between gas-powered and diesel trucks and identifying opportunities to introduce gas-fuelled transport. Additionally, we see supply inconsistencies for bottled gas across provinces, highlighting demand we can fulfil.
Our ambition isn’t just to be another LPG supplier. We want to build the necessary infrastructure to position ourselves as a leading gas provider with integrated services across Angola.

What are the key social responsibility initiatives Pumangol is undertaking?
Social responsibility is embedded in our identity. One of our flagship initiatives is the Escolinha Pumangol in Benguela, which supports around 100 children aged five and under. For many, the food they receive at the school is their only daily meal. We invest over USD 500,000 annually to keep the school running. We hope to replicate this model across all provinces, but cost remains a barrier.
In addition to education, we hold our annual health fairs, known as Saúde até Si, which are aimed at communities with limited access to essential services, as well as initiatives such as the Sopa Solidária, which takes place every Saturday throughout the month of March. Our team is fully engaged in these efforts, and we’ve been recognised by Forbes and consumer organisations for our social impact.

With Angola opening up to investment, what advice do you have for new market entrants?
Angola offers vast potential, but understanding the market is essential. We could easily have more than 83 petrol stations today – the capital is available – but logistical constraints make expansion risky.
Authorities encourage more stations, especially in underserved areas, but the infrastructure to support such growth is lacking. Road networks, transport companies and terminal conditions vary widely.
Investors must also understand that selling fuel is no longer enough. You need to offer a complete experience: ATMs, pharmacies and premium convenience stores. Innovations such as QR code payments and self-service pumps must be introduced carefully, with public education.
In short, investment success in Angola, particularly in the downstream, requires good timing and a long-term vision.

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