The proposal to restructure Noczim to eliminate the conflict of roles by separating regulatory functions from service provision is now before cabinet committees for approval.
Energy and Power Development minister Elias Mudzuri confirmed the developments and told the Zimbabwe Independent this week that the main aim was to form an independent distribution company for all petroleum products.
“The need to restructure came after several companies complained that Noczim was holding onto their fuel for long periods after taking delivery. So we need to set up an independent distribution company that would not be involved with marketing of the products,” said Mudzuri.
He said it was critical for Noczim to be a regulatory board and not to have a hand in distribution.
Several players in the oil sector have been calling for an overhaul of Noczim to transform it into a regulatory board overseeing the petroleum industry instead of maintaining its dual role of importing and distribution fuel while at the same time controlling competition.
Noczim’s responsibilities encompass both the distribution of petroleum products and the regulation of the fuel industry.
Under the Medium Term Plan (MTP) government outlined several policy measures it hopes would prop up the struggling energy sector that is facing “ageing and obsolete equipment and poor state of infrastructure”.
In improving the energy sector, government would “finalise and adopt the draft National Energy Policy, review property rights laws to attract foreign direct investment in the infrastructure sector and review regulatory framework governing energy and enforcement of issues of quality assurance”.
In a bid to attract investment to the energy sector, government plans to “take inventory of all stalled projects” and new projects would be embarked on after completion of the prioritised projects.
Completion of the rehabilitation of Feruka Oil Refinery and increased use of the pipeline is identified as one of the major projects.
“Effective importation of liquid fuels will be promoted by ensuring that all petroleum products are brought into the country by rail and through the Beira pipeline.
In that regard, once normality has been restored in the transport sector, restrictive levies will be charged to fuel importers using road,” reads part of the document.
Once Feruka pipeline is fully operational, downstream fuel receiving and dispatch facilities would be built countrywide.
Mudzuri said several Middle East countries including Iran have “shown great interest” in rehabilitating Feruka pipeline but have not “come up with firm plans for consideration”.
Zimbabwe imports all its liquid fuel requirements. The estimated monthly demand is 105 million litres of diesel, 90 million litres petrol and 15 million litres jet fuel. The transport sector consumes 60% and the agricultural sector 13% of the petroleum products.