HomeBusiness DigestGovt to buy Feruka refinery

Govt to buy Feruka refinery

GOVERNMENT plans to purchase the Feruka Oil Refinery in Mutare to refine crude oil in a desperate bid to ease fuel shortages, businessdigest can reveal.

Sources said officials from the Ministry of Energy and Power Develop

ment last month approached owners of the refinery — Capref — with a takeover proposal.

Capref is a consortium of major foreign fuel companies in Zimbabwe, who include BP Shell, Caltex and Mobil.

The sources said the talks started late last year after President Robert Mugabe announced plans to resuscitated the refinery to cut fuel import costs.

High profile meetings have been held between the director of Capref and senior government officials but the sources said the sticking point was the price.

Government plans to use Feruka to refine crude oil.

An official involved in the deal said the consortium had told the government that they were willing to sell at the right price.

“The owners are not refusing to sell, all they want is the right price for their asset,” said the official.

After the acquisition government will hand over the refinery to Noczim, which would be responsible for its operations. The sources said government engineers had already visited the refinery to assess the costs.

They however warned that the plant, which was shutdown in 1965, was too old and that it would cost billons in foreign currency to bring it back into operation.

The renewed interest in the refinery comes as government has failed to finance fuel imports due to serious foreign currency shortages.

Previous deals with countries like Libya, Kuwait and Equatorial Guinea collapsed after government failed to provide the foreign currency needed. Fuel dealers have ignored government demands to reduce the prices to $335 for petrol and $320 for diesel that was recently agreed by the parties. — Staff Writer.

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