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THE Zimbabwe Energy Regulatory Authority (Zera) says the recent discovery of commercial gas reserves in Muzarabani, Mashonaland Central, is a huge milestone expected to drastically reduce the country’s energy import bill and also impact positively on the country’s industrialisation and modernisation programme.
The regulator says it is following developments in Muzarabani with keen interest and expects the imminent commercial gas exploitation to result in huge foreign currency savings for the economy.
Australian exploration firm, Invictus Energy, recently confirmed gas discoveries in Muzarabani-Mbire districts, positioning Zimbabwe as one of the world’s largest future producers of gas.
The discovery followed the announcements, which had been made earlier by the Mines and Mining Development Minister Zhemu Soda, together with investors GeoAssociates and Invictus Energy following the discovery of substantial moveable hydrocarbons in the Upper Angwa, geological zone of the Mukuyu 2 exploration well.
The discoveries present limitless economic opportunities for the country including energy security, increased export earnings, job creation, alternative source of Government revenue, faster economic growth and development of several downstream industries, which fits in well with the country’s economic blueprint under the National Development Strategy 1 (NDS1).
Presenting a paper on the latest developments in the petroleum and electricity sectors during a recent media engagement workshop, an official from Zera’s economic regulation department said the country imported 1,041 billion litres of diesel last year with this year’s figures projected to be at 1,1 billion litres.
Petrol imports stood at 613 million litres last year with 817 million expected to be imported by the end of this year. For Jet A1 fuel, a total of 78 552 133 litres was imported in 2022 compared to this year’s projections of 59 071 541 litres while for LP gas, 59 898 546kgs were brought into the country last year with 48 886 400 kgs expected to be imported this year.
“The developments in Muzarabani will bring the much-awaited relief to the gas supply sector.
“Zimbabwe is 100 percent dependent on imports for all energy products and as such all external price changes affect the country directly.
“For temporary periods strategic stocks can be used to dampen prices,” said Zera.
Given that members of the Organisation of the Petroleum Exporting Countries (OPEC) are negotiating to further cut production as a way to push up prices, the regulator said the discovery of gas in Zimbabwe was critical.
It, however, said there has not been general agreement among members while the Israel-Gaza conflict so far has not had an impact on supply as well as prices but warned that if conflict, spreads supply and prices may be affected.
Petroleum pricing, the authority said, is determined by several factors such as shipping, ports charges, ocean losses, insurance, premium, demurrage, storage costs, pipeline transportation to Mutare and Harare, Government taxes and levies as well as administration costs and oil company margins.
“It is projected that petroleum prices will be reduced in January 2024 from US$1,68/litre (diesel) and US$1,55/litre (petrol), if the trend continues while the impact of the reviewed strategic stock levy will be minimised,” said the regulator.
It said the energy sector is expected to grow in line with the projected economic growth of 3,5 percent announced in the 2024 National Budget and there are no anticipated shortages of all products in the market. Zera has also noted significant growth through the construction of new retail sites in the country as investors are seeing opportunities in the sector.
However, rural communities remain behind as most new infrastructure is in urban areas. Competition is good for the consumers as prices charged are lower than cap price, said the regulator.
The growth is also as a result of a deliberate Government policy, which in December last year saw the introduction of a Government implementation agreement (GIA) aimed at risk mitigation and therefore, promoting the development of independent power producers. – The ManicaPost
Online Reporter