IN recent weeks, the country has witnessed a resurgence of long, winding queues at fuel service stations amid increases in the price of fuel at the pump. The Zimbabwe Independent’s projects editor Kuda Chideme (KC) sat down with Total Zimbabwe MD Ronan Bescond (RB, pictured) to seek insights into matters affecting the country’s fuel industry.
KC: Recently we have seen long queues resurfacing at service stations. Do we have enough fuel stocks?
RB: Total Zimbabwe maintains a continuous dialogue with authorities to ensure security and reliability of supply. Nevertheless, we all know that there are challenges in accessing hard currency and some hiccups may occasionally happen. We are confident; we will be able to secure enough funding as we continue to work closely with the relevant authorities and commercial banks.
KC: To what extent has your business been affected by the forex shortages?
RB: Total Zimbabwe imports all fuel it distributes in Zimbabwe. Due to the significant increase in international market prices, a given US dollar is bringing far less molecules of fuel than it used to a year ago. Hence, fuel companies need to mobilise more hard currencies to import same quantities of fuel.
KC: What measures have you put in place to cushion the business from the forex challenges?
RB: Total Zimbabwe purchases most of the fuels it distributes from Total Oil Trading and Total South Africa. It ensures Total Zimbabwe security and reliability of supply and competitive pricing terms. Our supply is currently funded through allocations of hard currency from the Reserve Bank of Zimbabwe, lines of credit issued by banks and other financing structures that the company manages to set up in coordination with RBZ and commercial banks.
Total Zimbabwe is working transparently in a continuous and open dialogue with authorities from the Ministry of Energy and Power Development, Zimbabwe Energy Regulatory Authority and Reserve Bank of Zimbabwe. We are conscious of the challenges. Operating the widest network in the country, we have committed most of our financial resources to the network to ensure all stations, including remote sites, remain wet to the best of our ability.
KC: Why is fuel expensive in Zimbabwe compared to other countries in the southern Africa region?
RB: The price of fuel is regulated under Statutory Instrument 100 from 2015. As a landlocked country, there is an inherent cost to importing the product. Nevertheless, pump price is strongly affected by a high level of taxes and levies. Government acted in January 2018, reducing the excise duties of petrol by 6,5 cents and of diesel by 7 cents to ease the pump price. Unfortunately, the increase in international oil price has eaten up the effort made.
KC: Why is it that the price of fuel in Zimbabwe does not reflect the changes in the international market?
RB: This is not the right perception on price of fuel in the country. Price of fuel in Zimbabwe does reflect the (price) changes in the international market, which has been steadily increasing over the past few months.
KC: Do you have any plans to expand your distribution network?
RB: Our current network comprises of 100 service stations covering the entire country. We also serve a large number of customers in aviation, mining and other sectors of industry. Over the past few months, we have been focussing on refurbishing our existing network, unveiling a new retail station design, “T-AIR”. This new-look, ultra-modern design petrol station promises a warm welcome, highest level of service and easy access to the broad range of Total quality petroleum products and services. Still, we add a few sites such as Total Msasa 2 on your way to Mutare and we will soon inaugurate Total Belvedere station on Samora Machel (Avenue) opposite the Agricultural showground. We are continuously assessing new sites and the completion of the “T-AIR” programme gives us new opportunities to invest. In parallel, we are upgrading our offer at the service stations with more product in Bonjour shops, additional food offers, new fitment solutions and professional car washes. We are partnering with famous brands such as KFC, Innscor, Eat and Lick and National Tyre Services.
KC: What plans do you have in place to expand your offering of low-carbon products for the Zimbabwean market?
RB: Total’s ambition is to become the responsible energy company developing renewable energy and improving energy efficiency. In line with the group strategy, Total Zimbabwe is finalising with Zera approval to introduce Diesel Excellium in our network: a new quality diesel additive aiming at protecting the engine while on the road. Suitable for all vehicle types, both new and old, this range of additive-enhanced fuels is designed to keep engines clean over time in order to maintain their efficiency. Total is already a major integrated player in low-carbon energy, involved in manufacturing equipment (SunPower solar panels and Saft batteries), building and operating solar plants (Total Solar) and distributing renewable energy (Lampiris). Total is currently investigating several opportunities in Zimbabwe.
KC: What is the outlook for business in the short to medium term?
RB: After 60 years of operations, Total Zimbabwe will continue to invest in Zimbabwe to expand its network, to professionalise the existing offer and to bring new services at its stations. We are committed to meeting the needs of a growing population and of a revival of the industry. The infrastructure is there to support this growth. We are also distributing high quality lubricants for automotive and industry markets.
They are key products for engine performance and sustained operations in the industry, mining etc. We will open shortly our first Total Quartz Auto Service at Avonlea service station offering lubricant checking, express oil change and car accessories. We are also planning to solarise 45 service stations as part of Total Group’s commitment to better energy and initiative to solarise 5 000 stations worldwide by 2021.