Algeria's Naftal allocates $1.7 billion to develop fuel distribution and transportation projects - Energy

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The Algerian company, Naftal, has developed an investment plan for the next 5 years, amounting to 1.72 billion US dollars, to meet the growing demand for fuel in Algeria.

Naftal is the arm of the Algerian oil company, Sonatrach, in the marketing and distribution of all types of fuel in Algeria.

For his part, the General Manager of the Naftal Corporation, Mourad Menawar, said that his company has a plan for the next five years, with an investment cost estimated at 250 billion Algerian dinars ($1.72 billion), to be borne by the Corporation.

He added, during his hosting of the Algerian People’s Daily Forum, that the investments come within the framework of the company’s efforts to implement a set of strategic projects, to ensure the continuation of activity to provide a public service represented in the marketing and distribution of fuel of all kinds.

Murad is enlightened
Head of the Naftal Public Complex in Algeria, Mourad Mnawar

liquefied petroleum gas

The Algerian official referred to the project of a pipeline to transport liquefied petroleum gas (LPG) fuel from the Arzew refinery in Oran state to Algiers, at a total cost of 60 billion Algerian dinars (410 million dollars), and with a transportation capacity of between 500,000 and 600,000 tons annually.

He stressed that the project is one of the company’s goals to develop services and overcome the problems and large expenses of transporting these materials.

Mourad Mnawar pointed out that the process of securing fuel for the central regions of Algeria is “complicated”, as it depends on transportation via ships from Oran towards the port of Algiers, as well as the port of the state of Bejaia, at a pace of 3 ships that take turns to secure and cover the demand in these densely populated areas.

He stressed that the demand for liquefied petroleum gas, estimated at 500,000 tons in 2018, rose in 2020 to one million and 100,000 tons, at a time when the demand for fuel declined by 5%.

Algerian Naftal
Petrol tanks belonging to Naftal Company

oil consumption

The director of Naftal mentioned that the marketing of fuel of all kinds was affected by the Corona crisis, as economic activity during the epidemic stage witnessed a significant contraction, which led to a decline in sales during 2019 and 2020, explaining that this decline was not reflected in the national economy, as 60 to 70 % of energy consumption in Algeria is final consumption, not directed to investment or economic activities.

He pointed out that Naftal was able to achieve financial balance thanks to other activities and diversification of services, especially in the field of equipping cars with liquefied petroleum gas kits, marketing lubricants, and other services.

Fuel prices in Algeria - Naftal
A gas station in Algeria

fuel prices

The general manager of Naftal said that his company’s demands to increase the profit margin in the fuel business will not affect fuel prices in Algeria.

He added that fuel prices are regulated, and the selling margin does not cover the costs for distributing fuel, especially in light of the ongoing inflation, pointing out that the oil margin is weak and has not changed since 2016, explaining that 80% of the fuel price represents taxes, and the fees are paid by the Corporation to the public treasury.

Mourad Mnawar revealed projects to export oils to African countries, especially Mauritania and Niger, in addition to exporting rubber wheels with the private Algerian company “IRIS”, and about exporting services and expertise, such as rehabilitating some gas stations in neighboring countries.

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