PRESENTATION OF THE MISSION OF THE HPSF
- REGULATION OF PETROLEUM PRODUCTS PRICES
Regulating the prices of petroleum products consists in keeping these prices stable by neutralising the inflationary effects of factors such as the international oil situation and the production and transportation costs of these products that could affect these prices.
To achieve this, three mechanisms are used, namely: the import or refinery exit price stabilisation mechanism, the transport equalisation mechanism and the constitution of stabilisation reserves.
The import or exit refinery price stabilisation mechanism helps to set a transfer price for the importer and the producer so as to compensate them for any positive difference between their real price and the price at transfer, usually known as a shortfall.
As for the petroleum products transport equalisation mechanism, it enables the standardisation of these product prices exit oil depots, by compensating marketers for the transportation costs of products between the main depot in Douala and the other depots. These costs are not passed on to consumers in the areas where the target depots are located.
The stabilisation reserves are resources constituted thanks to budget surpluses from previous years, and mobilised when in a given year, budgetary revenues are insufficient to meet regulatory costs.
The first two regulatory mechanisms are used in the pricing of petroleum products, which is done through the periodic preparation by the HPSF of a price structure for land-based fuels and a price structure for domestic gas.
Therefore, it is necessary, first of all, to describe the functioning of the mechanisms mentioned above and secondly dwell on the role of the HPSF in the framework of national supply.
- REGULATING NATIONAL SUPPLY OF PETROLEUM PRODUCTS
I.2.1. Overview on supplies
According to Article 2 of Order No. 024/PM/CAB of 13 February 2008 on the terms and conditions for supplying the domestic market with petroleum products, amended and supplemented by Order No. 125/CAB/PM of 10 September 2012, supply is defined as the delivery of petroleum products to storage depots.
Supplies are monitored by the Committee in charge of Monitoring the Supply of Petroleum Products to the Domestic Market (CMS), which is chaired by MINEE.
Moreover, the supply of petroleum products to the domestic market must cover not only commercial stocks but also regulatory stocks, including tool stocks (15 days) and security stocks (30 days).
I.2.2. Sources of supply
The domestic market is supplied with petroleum and gas products from two sources:
- National production
- Imports
According to Order No. 024/PM/CAB of 13 February 2008, SONARA has to supply 80% of domestic demand: this part is known as the approved market, while imports have to cover the remaining 20% and are defined as the liberalised market.
Deliveries of petroleum and gas products are made by ship and received at the SCDP’s primary depots in Douala.
The Production of petroleum products
White products (super, kerosene and diesel)
- National production of petroleum products is carried out by SONARA, the country's only refinery, which has been out of production since a fire incident which occurred on the night of 31 May 2019.
- It should be noted that transfers of petroleum products by coastal shipping from Limbe to the SCDP depots in Douala are carried out by SONARA, on the basis of the monthly supply programme validated and forwarded by the Committee for the Monitoring of Supplies (CMS).
DOMESTIC GAS
The domestic production of LPG was carried out by SONARA and, since April 2018, by the floating natural gas processing and liquefaction plant at BIPAGA.
Currently, the Bipaga plant is the only functional plant, and its production accounts for around 20% of domestic consumption.
The production at BIPAGA was initially intended to supply the SCDP depot in Yaounde, but has been extended to private filling centres in Yaounde.
Imports of petroleum products
White products (super, kerosene and diesel)
With regard to supplying the liberalised market, a joint MINEFI-MINDIC Order No. 00126 of 30 June 1998 defines certain conditions and procedures for importing petroleum products. An ad-hoc committee in charge of petroleum product imports (CPPI) was set up by joint order No. 01557/MINDIC/MINEFI of 28 September 1998, under the aegis of the HPSF.
Under this Order, the domestic market is open to competition for 20 % of domestic demand.
DOMESTIC GAS
The import of LPG is subject to a competitive tender procedure open to all companies with an import licence, in accordance with the regulations in force.
It should be noted that from 2013 to 2018, TRADEX held a monopoly on LPG deliveries to the domestic market.
The return to orthodoxy, namely invitations to tender in 2019, has reduced import premiums from 430 to 303, then to 270 and finally to US$160/MT for deliveries in 2022.
I.2.3. Supply procedures
Since a fire incident at SONARA on 31 May 2019 which put its production facilities out of operation, a Supply Monitoring Committee was set up by Order No. 051/CAB/PM of 04 June 2019. This Committee is chaired by the SG/PMS with the MINEE as vice-chair.
In March 2020, a new procedure for supplying the domestic market with petroleum products was introduced including:
- Selection of traders that supply the products, and
- Importers, who are obliged to buy the products from the trader(s) selected at the end of the consultation process.
This new mode began with deliveries in March, April and May 2020 and is continuing to date.
To avoid market shortages and disruptions, MINEE has set up a Committee in charge of monitoring petroleum products transfer whose role is to draw up a monthly transfer programme, to monitor logistical resources as well as to implement actions likely to help secure the country's supply in petroleum products.
In the event of rail transport malfunction and/or need, express transfer authorisations by tanker truck may be granted to marketers by the HPSF so as to compensate for shortages. Such authorisations may only be issued on the basis of an express request from the HPSF.
This Committee is placed under the aegis of the HPSF.
I.2.5. Distribution of petroleum products
Petroleum products are distributed by marketers through their distribution networks, which include petrol stations and consumer outlets.
However, in an effort to make petroleum products more accessible to consumers, the HPSF builds pilot petrol stations in rural areas where marketers are hardly established due to the low profitability of their businesses in these area.
At present, the HPSF owns around twenty pilot petrol stations, operated by marketers who pay the HPSF a contractually fixed fee.
The CSPH has also built three LPG filling stations, one in Maroua, one in Bertoua and another in Bamenda, with a view to improving access to domestic gas in the Far North, East and North-West regions of Cameroon. Two projects to build two filling stations in the towns of Kumba and Ebolowa are currently underway.