Maputo to float tender for butane gas

Butane is the fuel used for cooking by many urban households.

In its absence, those who do not also own an electric stove are forced to resort to firewood or charcoal.

As a result prices of woodfuel have risen sharply in recent weeks.

The increased demand for woodfuel puts added pressure on the forestry resources near the major cities.

Addressing a Maputo Press conference, Namburete said the new tender was set to be launched yesterday.

South African company Engen won the last tender. But Engen failed to honour its contract after its refinery was temporarily shut down for maintenance.

Engen offered as alternatives gas supplied by Sasol and BP Shell: but the Sasol refinery

suffered a breakdown in one of its bottling lines, and BP proved unable to honour Engen’s promises.

This coincided with the onset of the South African winter, and increased demand for gas within South Africa.

Namburete apologised to Mozambican consumers for misleading statements from his ministry which had claimed that the crisis would be over by mid-June.

“The suppliers were not true to their word,” said the minister. They told us in early June that the situation was being normalised, but on the contrary, the crisis has worsened.”

South African suppliers, thanks to their proximity, can offer lower prices than suppliers of butane from anywhere else. Indeed, in the past only South African companies have bothered to bid for the tenders.

There has been a longstanding relationship between Mozambique and Engen, and this is the first time a serious problem has occurred.

The bleak news for consumers is that there is no end to the crisis in sight.

It will take a month to choose the winning bidder for the tender, and probably many months more before gas from the new supplier starts arriving.

In the meantime, Mozambique will not actually cancel the contract with Engen (which still has three months to run).

But Namburete promised that the government will activate penalty clauses in the contract, holding Engen responsible for the breakdown in supplies.

Namburete warned that, with a new supplier, the price of gas is likely to rise, because of the increased transport costs.

Furthermore, the small size of the Mozambican market for gas will add to the difficulty and costs of hiring a ship to carry the fuel to Maputo.

“The amount of gas we consume is very small,” said the minister.

“So it has not been very economic to bring it by ship from other places, but that’s what we’ll have to do this time, with implications for the price.

“Gas will be more expensive, but there will be gas. At least we’ll try to reduce the pressures people are suffering today.”

Furthermore, the government feared that, if it simply relies on Engen, there might be a new crisis in December, when South African gas consumption rises, thanks to the festive season.

Small quantities of gas continue to enter the country from South Africa.

Thus at the weekend a consignment of 80 tonnes crossed the border ‘ which is less than two day’s worth of normal supplies.

Southern Mozambique usually consumes 45 tonnes of gas a day.

Namburete also announced that the government has authorised investment of US$5 million in setting up a distillery for the natural gas from the Temane and Pande fields in the southern province of Inhambane. ‘ Aim.

July 2006
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