THE Government is planning to merge the National Oil Infrastructure Company of Zimbabwe (NOIC) with Petrotrade, Energy and Power Development Minister Dr Samuel Undenge has said.
He said this while responding to questions in Parliament last Wednesday where legislators demanded an explanation as to why NOIC has not had a board since 2015.
“We have delayed creating a board because we are in the process of deliberating on the mechanism for Petrotrade to merge with NOIC and when you want to merge you cannot create a board. There will be a single board. So, there are these merger deliberations, which are taking place,” said Dr Undenge.
He said the two entities were being merged in order to achieve the advantages of the economies of scale.
“Once there is that merger, we have the other company, which looks after the procurement side. It goes upstream and then we have this other company, which is downstream, which looks after rural areas.
“It is only that we have deliberations and discussions, which are at an advanced stage, to the effect of seeing whether Petrotrade can merge with NOIC so that we achieve the advantages of economies of scale,” said Dr Undenge.
In 2015, NOIC declared a $4 million dividend to Government. The dividend was achieved on the back of increased throughput and stringent cost containment measures the parastatal instituted resulting a 37 percent increase in profits in 2015. Petrotrade — a private company wholly-owned by the Government — was formed following the unbundling of the National Oil Company of Zimbabwe in 2011. The entity is responsible for downstream activities including the selling of petroleum and lubricants through bulk sales and service stations.