A multi-fuel distribution company to supply Mozambique

Mozambique

Helder Chambisse, Chairman and CEO of Petromoc, talks to The Energy Year about investing in fuel storage and distribution infrastructure and exciting new prospects in Mozambique’s nascent biofuels segment. Petromoc is a Mozambican state-owned company engaged in the import, storage, distribution and commercialisation of liquid fuels and LPG.

How is Petromoc positioned in Mozambique’s market for automotive fuel?
Petromoc is a major player in Mozambique’s fuel sector and our market share is around 30%. The company has a network of roughly 200 petrol stations across the country, comprising company and dealer-owned locations, as well as FUNAE sites. FUNAE is a government entity that is responsible for making fuel available in rural areas.
Our revenue in 2023 was USD 480 million and our volumes have seen steady growth in the past three years, increasing from around 350 million litres to nearly 480 million.

What are some important developments in the fuel market over the past two years?
The Mozambican fuel market is experiencing a boom with a surge of OMCs [oil marketing companies], but Petromoc has adapted and thrived. Our response has been two-pronged.
First, we invested in our presence across the country by building new stations and modernising our existing ones to keep pace with our competitors’ offerings.
Second, we’ve upgraded our storage infrastructure at key ports to keep them up to date with safety and environmental standards, to make our operations more efficient and to increase our business of offering storage services to other companies.
Our approach has yielded positive results. Sales volumes have risen steadily and, more importantly, we have reversed past financial losses and eliminated a significant amount of bank debt. We are now in a strong financial position for the future.

Who are the main players in the Mozambican market for aviation fuel?
The aviation fuel segment is also seeing increased competition. There are currently three key players competing for a customer base that is not so vast and not increasing that much. Petromoc looks at leveraging its experience over the years as well as its infrastructure and equipment for both storage and service at airports across the country.

How important is the expansion of your maritime terminal at Pemba?
We are expanding the fuel storage facility at Pemba to be able to cater for the increased consumption in the region and the expected growth in the coming years.
The facility’s current capacity of 7,500 cubic metres will be increased to 18,000 cubic metres, including aviation fuel, which is currently not handled at the terminal. This will eliminate the need for secondary fuel storage and transfers from Nacala, and allow for the reception of higher volumes of fuel, hence improving the logistical efficiency and allowing Pemba Terminal to play a greater role in supporting the region’s development.

What is Petromoc’s strategy for selecting partnerships?
At Petromoc, we believe in the power of partnerships to unlock market opportunities. Through them, we can ensure investments in infrastructure and retail networks and expand our footprint and our capabilities to provide better service to the communities we serve.
We have strategic partnerships for storage in Beira, which serves as a hub for fuel supplies to landlocked countries in the region, through two companies. One is Petrobeira, a JV with a global and highly experienced terminal operator, and the other is INPETRO, another JV with IPG, a global trader and NOIC, the state-owned OMC from Zimbabwe.
On the distribution side, we have Petromoc-Sasol, a successful partnership with Sasol from South Africa, a key player in the fuel distribution market with a sizable network and a market share of around 10%.
We also engage in partnerships with retail dealers to ensure we continue to invest in the expansion and modernisation of our retail network. The key element in our selection of partners is our common goals and shared commitment to win-win solutions, business models and strategies. It has worked successfully.

Does Petromoc have any involvement in Mozambique’s mining sector?
Fuel is a critical input for mining operations, and for over 12 years, we’ve been the main supplier to Vulcan, the coal mine in Moatize, where we have established a reliable supply chain, ensuring a steady flow of fuel at competitive prices, allowing our clients to focus on their core business without worrying about disruptions.
We’re also key suppliers to several other mining operations in the country where our involvement goes beyond simply providing fuel. We have designed efficient supply structures that minimise downtime and maximise productivity, as well as on-site storage solutions and technical assistance for managing the infrastructure.

What are the company’s main objectives for the next few years?
Maintaining a strong market share of around 30% remains our core objective. We will achieve it by optimising our existing network of stations through refurbishments and upgrades, or by adjusting layouts to maximise sales.
To meet growing fuel demand across the region, however, we will have to do more than grow our retail network. We are planning significant investments in storage infrastructure to increase our total operational capacity from around 350,000 cubic metres to more than 600,000 cubic metres within the next two years. We aim to position ourselves as a competitive supplier to markets in South Africa, Zimbabwe, Zambia and the Democratic Republic of the Congo.
The future also holds exciting diversification opportunities for Petromoc. Biofuels are set to become increasingly important in the country’s energy mix, with legislation recently passed mandating that diesel be blended with them. Petromoc is ready to capitalise on the shift to biofuels and we have already allocated storage space in our facilities to support the government’s lead.

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