OIL REFINERY, RESERVE FACILITY SEPARATE PROJECTS - MINISTRY

MBABANE – “The USA Distillers’ Oil Refinery Project does not need Cabinet’s approval”

The Swazi Government says the Strategic Oil Reserve facility and the Oil Refinery are two different projects.
Government has also stated that the Oil Refinery is a private initiative. The Ministry of Natural Resources and Energy responded through the acting Principal Secretary Dumsani Mngomezulu.
 “Although these projects are in the same industry they are separate and different in nature.

The Strategic Oil Reserve facility is for government for ensuring national security of supply over a determined period meanwhile, the refinery project is a private initiative which shall operate independently. It is worth noting that the strategic oil reserve project is primarily for sourcing and storing fuel for emergency cases which will be recycled through sales for refreshment while the refinery is for producing fuel for secured markets,”  said Mngomezulu.    He said that the ministry never contradicted itself in all the said letters.

He explained basically that the ministry was approached by USA Distillers for support and clearance on the establishment of the refinery as a private initiative, like any other private sector initiative that had to be cleared by government. “USA Distillers made it clear to the ministry that the project is a private initiative to produce and sell fuel to their markets. As such, the company explicitly stated that there would be no need for government resources/guarantees or Cabinet approval. During the discussions, the strategic oil reserve facility at Phuzumoya came up and the ministry explained to USA Distillers that strategic depots are government’s initiative for security of fuel supply and that government had already entered into an agreement with a company to develop the facility which would be handed over to government after a certain period. At no point during the discussions was it agreed that the refinery is connected to the strategic oil reserve facility at Phuzumoya.

Mngometulu went on to say: “USA Distillers also sought land at Phuzumoya for the refinery. The Ministry had no problem as Phuzumoya is large and has been designated as an area for petroleum activities. However, USA Distillers was encouraged to finalise the feasibility study which was to ascertain the size of land required for the refinery.” The acting PS said government’s position was that the ministry encouraged private enterprises and supported the USA Distillers project as a private initiative. He pointed out that this was particularly the case as such investments had the potential to bring job opportunities for the country.

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