Speaking at the LPG (Liquefied Petroleum Gas) Expo, taking place this Wednesday and Thursday (17 and 18) in Maputo, the President of Galp Mozambican, Paulo Varela, emphasised the issue of LPG accessibility as the main obstacle to supplying this fuel in the country’s inhabited regions.
In his speech, Paulo Varela said that “the big challenge we face in Mozambique is not very different from other markets, especially considering the size of the country. Making LPG available close to populated areas remains our main obstacle.”
During a panel discussion on infrastructure investments in Africa, the executive elucidated Galp’s active role in the fuel market and its expansive ambitions. “As well as Mozambique, we are investing in countries such as Namibia, Angola, Guinea-Bissau and Cape Verde. Demand for LPG should grow with supply, with investments focussed on regions such as Nampula, increasing proximity to our customers”, explained Paulo Varela.
Also at the same forum, he recognised the challenges facing the industry: “To attract investment in this sector, it is crucial that there is an effective return on investment. It can be seen that only four of the thirty licensed companies are actually selling LPG, indicating that the business may not be as profitable as expected.”
Varela also stressed the need for a strategy that combines subsidising LPG for the most vulnerable segments with a pricing policy that ensures that investments are recovered.
The Mozambican President also pointed to technical issues as critical differentiators in the market: “Controlling LPG cylinders and ensuring that each company operates with its own model and valve will increase security and could encourage more investment in infrastructure.”
“It is essential to expand the LPG reception and storage infrastructure in the Northern Zone to make the product more accessible in regions that are currently underserved. The private sector has been the main driver of these initiatives, although government actions will also help to facilitate access for the most disadvantaged population,” he urged.
The head of Galp Moçambique concluded by highlighting population growth in Mozambique and Africa as an opportunity for expansion in the LPG sector, but pointed out that overcoming existing challenges is essential to capitalise on this trend.
