Full-service fuelling in Mozambique

Mozambique

Danilo Neves Correia, general manager for Puma Energy in Mozambique, talks to The Energy Year about the challenges of securing a steady stream of affordable fuel for Mozambicans and recent transformative developments in the company’s aviation business. Puma Energy is an international oil company that engages in fuel storage, refining and distribution.

Can you give us an overview of Puma Energy’s presence in Mozambique?
Puma Energy is a strong competitor in Mozambique’s automotive fuel market, holding a market share of around 17%. Our presence extends beyond just petrol stations. We also distribute fuel directly to businesses and supply aviation fuel.
Expansion is a key focus for Puma Energy. We currently operate a network of 45 retail stations, and we have further expansions planned due to our confidence in the Mozambican market. Ground fuels such as diesel and gasoline are our primary revenue generators, but lubricants yield the highest profit per unit sold due to their higher price point and margins. We are an important player in the market.

How does Puma Energy approach its local B2B operations?
Our B2B business is a source of immense pride. We envision a future where obtaining fuel for your business is as simple as turning on a tap at home. We offer our B2B customers a comprehensive solution that includes everything from fuel storage to credit, consignment and billing. We also provide ATG [automatic tank gauging] systems that monitor fuel levels and usage and anti-theft systems for added security. Looking ahead, we aim to incorporate solar solutions and expand our LPG offerings. Currently, about 20% of our B2B customers use LPG.
The Mozambican automotive fuel market is highly price-sensitive, with some competitors offering unsustainable discounts that can deplete their working capital and disrupt supply. Puma Energy takes a different approach by providing a reliable, all-encompassing service, allowing our clients to focus on their core activities rather than fuel supply. We offer reliability of supply.

What steps is Puma Energy taking to expand into renewables?
We are committed to embracing cleaner energy options for the future and are working with partners on various solarisation projects. By 2030, we aim to generate at least 25% of our EBITDA from renewables. Solar energy offers a dual benefit by reducing our environmental footprint and lowering our fuel supply costs.
LPG is a promising transitional fuel source for Mozambique. The country has the potential to be self-sufficient in LPG production, and we are investing heavily in bottling and distribution infrastructure to make clean-burning LPG readily available to both households and businesses. LPG offers numerous benefits, including cleaner burning than traditional fuels, which helps reduce air pollution. It is a reliable and accessible energy source for multiple applications, and investing in domestic LPG production can contribute significantly to Mozambique’s economic growth.

What are the main challenges to maintaining a steady supply of fuel for the Mozambican market?
Since Mozambique lacks domestic fuel production or refining capabilities, it relies entirely on imports, which are denominated in US dollars. The country must ensure it has sufficient foreign currency reserves generated by exports such as coal and aluminium to pay for an uninterrupted stream of fuel imports. Additionally, a robust banking system is essential for local players to secure bank guarantees and letters of credit for participating in the importation process.
For distributors, securing affordable fuel for Mozambicans is a complex challenge. The government agency Imopetro awards tenders to the lowest bidder, and the challenge lies in minimising the premium added to that price for bringing the fuel to market. Mozambique is still a developing country, so the cost of fuel to the public is crucial.
Another significant obstacle is infrastructural limitations. Delays in berthing, discharge and turnaround times for fuel tankers at our ports increase costs for fuel traders, ultimately impacting the final price at the pump.

Can you comment on Puma Energy’s recent acquisition of BP’s aviation business in Mozambique?
Our acquisition of AirBP’s aviation fuel assets is a game-changing move for our aviation business in Mozambique. Previously, we had a throughput contract with Petromoc and paid them to use their equipment and receive services from their staff. Now, we have our own refuelers, depots and personnel, allowing us to manage the service directly to meet our safety and quality standards, giving us a competitive edge. Owning both the fuel and the refuelling equipment gives us complete control over the entire process, resulting in better fuel availability and overall service for airlines.
Although the aviation business offers attractive margins due to deregulation, it is capital-intensive. Ensuring fuel availability at various airports across Mozambique is challenging because the quality of roads and infrastructure can severely impact logistics. Wherever possible, we invest in operational assets because the more elements we control in the supply chain, the higher our efficiency and the better service we can provide to our customers.

How do digitalisation and new technologies come into play within Puma Energy’s operations?
Our vision is for fuel to be as easy to obtain as water from a tap. Digitalisation can help us achieve this goal, but first, we need to overcome common obstacles in Africa, such as limited network access and the lack of robust physical infrastructure, which is the bigger hurdle.
Digitalisation can bring transformative change by enabling customers to place fuel orders, track deliveries, check balances, make payments and even analyse fuel consumption – all from a phone. Some of our international customers already demand these services, while others may not yet realise how digital solutions can simplify their lives. As a young and vibrant continent, Africa has the opportunity to leapfrog conventional technologies and move directly into advanced services.

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