Angola experiences fuel shortage due to difficulty in accessing foreign exchange

Angola is currently experiencing fuel shortage. This shortage in the country’s fuel stations is mainly due to the difficulty in accessing foreign exchange to pay for the import of refined products.

Angola’s President, João Lourenço is due to receive a detailed report on May 7. The report is on the current scarcity of fuel in the country’s market, ANGOP has learnt. The issue was subject of discussion on May 6 during a meeting held at the Presidential Palace, which aimed to provide accurate explanations to the Head of State on the current shortage of fuel in the country.

The meeting counted on the participation of several ministers namely of Mineral Resources and Petroleum, of Energy and Water and of Finances, as well as the governor of the National Bank of Angola, the CEO of the state-owned oil firm Sonangol, which has been tasked of reporting on the fuel crisis.

Sonangol justified on Saturday that the shortage of fuel that has been recorded in the main gas stations of the country is due to the hardships it has faced to have access to foreign currencies for the import of petroleum refined products. The Angolan State through Sonangol, spent in the first trimester of 2019, a gross value estimated at USD 221.4 million to import 397, 458 metric tonnes of petroleum.

In a public communiqué, the oil firm pointed out that another negative factor contributing to the problem is related to the high debt owed by the main clients of this industrial segment that consume roughly 40 percent of the overall fuel.

The systematic malfunctions recorded by the cabotage ships also contributed to the scarcity of fuel in the gas stations, besides other factors such as, the bad conditions of the roads, along with climate conditions, which sometimes prevent the ships loaded with refined petroleum from docking in the ports.   Angola, whose crude oil output is of 1.5 million barrels a day, is the second in sub-Saharan Africa following Nigeria, to produce 1.6 million crude oil barrels per day.

Angola imports 80 percent of its refined products, while 20 percent of its need is locally produced by Luanda refinery. In order to increase the domestic fuel output a project is underway for the construction of refineries in Lobito and Cabinda.

A programme for the modernization and expansion of Luanda Refinery is also underway by the Italian Eni, whose aims is to increase its processing capacity from the current 280 tonnes to 1,200 tonnes of fuel day within a three-year term.

With inputs from agencies.

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