Martin Endjala
The National Petroleum Corporation of Namibia (Namcor) is contemplating a reassessment of its expansion plans for its retail service station network throughout the country.
Initially, the company aimed to establish 33 service stations nationwide by 2024, but to date, only 16 have been successfully established.
During a recent press conference, Namcor’s acting Managing Director, Shiwana Ndeunyema, disclosed that the company has embarked on a three-pronged strategy to address the challenges it has encountered in expanding its retail service station network.
The strategy aims to identify more effective operating models to reach its expansion goals.
“Whatever operating models we propose must address the issues related to fluctuating fuel prices and associated forex exposure. To tackle this, Namcor has adopted a three-point strategy, focusing on the acquisition of oil-producing assets in stable jurisdictions, enhancing the profitability of downstream operations, and expanding our network of retail service stations,” he explained.
Ndeunyema clarified that the objective behind establishing these service stations was to provide the state-owned entity with sufficient critical mass to shield itself from the impact of fluctuating fuel prices.
Moreover, the new service stations are an integral part of Namcor’s retail strategy to establish and secure strategically positioned fuel and lubricant distribution networks, along with the infrastructure necessary to bolster the company’s brand.
Ndeunyema also emphasized that the company is currently evaluating its way forward, which will be outlined in the forthcoming strategy model.
However, even though five years have passed since the initial plans were made, only 16 service stations have been successfully constructed as of March 31, 2023. Three more are planned for the coming year, leaving a deficit of 33 service stations that were originally planned.
The Managing Director attributed the slow pace of construction to the moratorium imposed by the Ministry of Mines and Energy on the establishment of retail networks, citing congestion in the retail market.
However, Ndeunyema clarified that Namcor is fully prepared to compete with other entities, including the private sector, to navigate the challenges posed by the two levies. Consequently, the company has adopted a strategy that involves taking over existing operational systems and rebranding them.
Ndeunyema added that, even with their current strategy, they still face challenges in the absence of the two levies. They view the establishment of service stations as crucial until they can develop a new sustainable operating model in line with their mandate.
Meanwhile, the state-owned entity plans to invest N$100 million in the current financial year to establish 19 service stations, furthering its commitment to expanding its retail service station network.
