Burundi - Review of petroleum import and distribution arrangements

Joint UNDP/World Bank Energy Sector Management Program Activity Completion Report No. 012/84 Country: BIuDI ActiviY: REIEW OF PET IMM IeOe, MR DISTRIBUTION ARRANGEMENTS JANUARY 1984 . Report of the joint UNDP/MrId Bank Energy Sector Management Program This document has a restricted distribution. Its contents May not be disclosed without authorization from the Government, the UNDP oi the Worid Bank.  Energl Sectot Maragement Program The Joint UNDP/World Bank Energy Sector Management Program is designed to provide a rapid and flexible response to governments who request assistance in implementing the policy, planning and institutional recommendations of the Energy Assessment Reports produced under another Joint UNDP/World Bank Program, or in carrying out prefeasibility studies for energy investments identified in these reports. The Energy Sector Management Program can provide the following types of assistance for countries which have had assessments: O assistance to improve a government's ability to manage its energy sector, for example by defining staffiug and vork programs, evaluating management information needs, identifylng sources of public and private finance, developing a medium-term investment plan; o prefeasibility work on priority investmant plans, especially those which vill improve the efficiency of *uergy use, bring about economic fuel substitution, or provide enough affordable energy to rural areas; o specific short-term assistance in institutional aad manpower developmont, both at the sectora. and agency levels. The Program ai"t to supplement, advance and strengthen the Impact of bilateral or multilateral resources already available for technical assistance in the energy sector. Funding of the Program Thb Program is a major International effort and, while the core fInance has been provided jointly by the UNDP and the World Bank, important financial contributions to che Program have been nade by the Govertnents of the United Kingdom, the Netherlands, Denmark, Finland, Norway, Sweden, Australia and New Zealand.  g BURUNDI REVIEW OF PETROLEUM IMPORT AND DISTRIBUTION ARRANGEMENTS JANUARY 1984 . ID  TABLE OF CONTENTS Page No. 1. Background and Summary ...*. .......................... 1 II. Possible Sources of Supply ........................... 4 III. Posseble Supply Routes 7 IV. The Petroleum Market in Burundi r u n di..,.............. 10 V. The Role of the Goveriment il VIe Seminar on the Downstream Petroleum Industry ......Ids 15 TABLES 2.1 The Cost of Gas Oil fromVarious Sources of Supply, Augst 1983 6 3.1 Comparative Cost of Gas Oil According to Different Sources and.Supply Routes 8 4.1 Petroleum Product Consumption in Burundi, 1982 1..0982 10 ANNEXES 1.1 Description of the Position of Adviser to the Hydrocarbons Unit 1.......16 2.1 Operational Testing of the Southern Route by Shell Kampala . 19 2.2 Price Structure of Key Petroleum Products as of May 17, 1983 20 3.1 Refineries: East Africa/Middle East ......... t 21 3.2 Refinery Crude Distillation Unit Capacities ....... .. 22 3.3 Existing Refinery Capabilities, Planned Expansions, and Planning New Refineries 23 3.4 Overall Distillation and Upgrading Capacity For All Gulf, Red Sea, and Mediterranean Refineries, 1982-1990 ...................... 24 3.5 Overall Refinery Product Mix as a Function of Capacity Utilization for All Gulf, Red, Sea, and Mediterranean Refineries, 1982-1990 .......25 4.1 Competitiveness of Supplies to the East Africa Region 26 4.2 East Africa Supplies 28 5.1 Structures des prix 29 6.1 * Note d'information 31 Nap: IBRD 15268R Burundi: International Surface Transport Connections  BURUNDI REVIEW OF PETROLEUM IMPORT AND DISTRIBUTION ARRANGEMNTS I. BACKGROUND AND SUMMARY 1.01 In 1981, a UNDP/Norld Bank Energy Assessment1/ in Burundi examined the problem of the very high cost of imported oil, which at that time amounted to about $100 per barrel c.i.f. Bujumbura (i.e. including freight but exclusive of taxes). The bulk of petroleum product imports in 1981 vere bought from the Mombasa refinery, shipped by pipeline to Nairobi and then by truck via Uganda and Rwanda to Bujumbura (see map IBRD 15268R). According to the asseesment, over a third of the cost of the oil imports vas attributable to the differences between: (a) Kenya's export price and prices in the open market and (b) the cost of the pipeline-truck transportation route via Nairobi and rail-lake transport from Dar es Salaam tu Kigoma and up to Bujumbura. Pollowing-up on the assessment, and at the request of thc Government of Burundi, the Energy Sector Management Program (ESMP) funded the services of a consultant who visited Burundi in August 1983 to assist the Government in reviewing and evaluating alternative mechanisms for petroleum product import and distribution in order to determine whether and how the cost of these imports could be reduced. The consultant analyzed: (a) options with respect to sources of supply, (b) the various possible supply routes, and (c) the petroleum market in Btfrundi. The consultant also presented a brief seminar on the dovwstream petroleum industry to Government officials. This report summarizes the findings of that mission. 1.02 Currently about kalf of Burundi's petroleum producte continue to be purchased from the Mombasa refinery and transported via Uganda, with the rest procured directly from the Middle East open market, unloaded at Mombasa, and transported via the same route. According to the new price structure established by the Ministry of Commerce and Industry (MCI) in nid-May 1983, which vas based on the price of products fro