Government Approves Creation of Company Focused On Procurement of Petroleum Products

The Mozambican government has recently approved the establishment of the National Petroleum Products Procurement Company (ENAPP), a new state-owned entity tasked with centralizing the procurement and management of fuel supply across the country. This strategic move aims to bolster national energy security and address persistent fuel supply disruptions that have plagued the market. ENAPP is set to replace a three-decade-old procurement model, signifying a significant shift in the state's approach to managing a critical economic sector. The company will operate with administrative, financial, and legal autonomy, overseeing the entire fuel supply chain from planning to monitoring, thereby increasing state oversight and aiming for enhanced efficiency and emergency response capabilities.

Mozambique's Council of Ministers has taken a decisive step to overhaul the nation's fuel supply architecture with the approval of the National Petroleum Products Procurement Company (ENAPP). This newly formed publicly-owned entity is mandated to centralize the procurement and management of petroleum products, marking a fundamental departure from the previous model that had been in place for approximately thirty years. The government's rationale for this significant institutional reform stems directly from recent intermittent fuel shortages, which have exposed vulnerabilities in the country's supply chain, attributed in part to geopolitical tensions and foreign currency scarcity.

This development is poised to have far-reaching implications for Mozambique's energy sector, affecting market dynamics, regulatory oversight, and the operational landscape for both domestic and international players. The creation of ENAPP underscores a renewed governmental emphasis on energy security and strategic control over essential resources. This article will delve into the legal framework underpinning ENAPP's establishment, analyze its potential impact on the Mozambican petroleum market, and consider the broader legal and economic ramifications for practitioners.

The Mozambican energy sector is primarily regulated and supervised by the Ministry of Mineral Resources and Energy (MIREME), with the Energy Regulatory Authority (ARENE), established by Law 11/2017 of 8 September, playing a crucial role in regulating electricity, natural gas, and fuel subsectors, including licensing, tariffs, quality standards, and competition. The broader legal framework for petroleum operations has seen recent updates, notably with the approval of Law no. 8/2026 of 3 June, the New Petroleum Law, which aims to align the sector with current economic, technological, and energy realities, reinforcing domestic supply requirements and local content. Furthermore, Decree No. 45/2012 establishes the legal regime governing the production, import/export, storage, transport, and trade of petroleum products, while Decree No. 84/2020 of 18 September details the regulations for licensing petroleum facilities and operations.

State-owned enterprises (SOEs) in Mozambique operate under the principles and rules enshrined in Law No. 3/2018 of 19 June, and its corresponding regulation, Decree No. 10/2019 of 26 February. These instruments define the state's role as a shareholder and govern the organization, operation, and management of SOEs. Significantly, a recent revision to the State-Owned Enterprise Sector law, approved in May 2026, introduces a clearer distinction between the state's business activities and the exploitation of natural resources, with the latter now subject to specific legal frameworks. Prior to ENAPP, the procurement model largely involved Imopetro, the country's exclusive fuel import agent, which coordinated with private operators, a system that the government now seeks to refine and replace due to perceived vulnerabilities.

The establishment of ENAPP represents a significant centralization of power within Mozambique's petroleum sector. With administrative, financial, and legal autonomy, ENAPP is empowered to oversee the entire spectrum of fuel supply operations, from planning and contracting to coordination and monitoring. This shift directly replaces a model where Imopetro, while an exclusive import agent, operated in conjunction with private sector players. The government's stated aim is to achieve greater state oversight, improve supply efficiency, and enhance emergency response capacity, particularly in light of recent fuel shortages attributed to global geopolitical factors and foreign currency constraints.

From a legal perspective, ENAPP's creation must be viewed in conjunction with the recently enacted New Petroleum Law (Law no. 8/2026 of 3 June). This law mandates a minimum quota of 25% of petroleum and gas, including LNG, for the domestic market at competitive prices, and ensures 100% of condensate is allocated to national development. ENAPP's centralized procurement role is critical to enforcing these domestic supply obligations and achieving price stability. However, this increased state intervention raises questions regarding competition law and market liberalization. While the government emphasizes energy security, the transition from a mixed private-public procurement model to a fully state-controlled one could potentially impact market competitiveness and the participation of private entities.

Furthermore, the recent revision of the State-Owned Enterprise Sector law, approved in May 2026, introduces a crucial distinction between the state's business activity and the exploitation of natural resources, with the latter requiring specific legal regimes. ENAPP's mandate for "procurement and management of fuel supply" positions it squarely within the realm of business activity, albeit in a strategic sector. Legal practitioners will need to closely examine how ENAPP's operations are framed under this revised SOE law to ensure compliance and clarity regarding its scope and limitations, particularly concerning its interaction with the broader natural resource exploitation framework. The Public Procurement Regulations, which apply to state-owned enterprises and mandate tenders for procurements exceeding $10 million, will also be critical in governing ENAPP's operational transparency and accountability.

The operational modalities of ENAPP will be crucial in determining its success and impact. The IMF, in a 2024 report, highlighted vulnerabilities to corruption in SOE procurement processes due to broad discretion for direct procurement. Therefore, the specific regulations and internal governance structures adopted by ENAPP will be paramount to ensuring transparency, efficiency, and preventing potential abuses. While a separate $50 million fund was recently approved to address immediate fuel import payment issues through Petromoc, ENAPP represents a more fundamental, long-term structural change to the country's fuel supply management. The interplay between these short-term measures and ENAPP's long-term strategy will require careful monitoring.

The establishment of the National Petroleum Products Procurement Company (ENAPP) signifies a profound shift in Mozambique's energy policy, prioritizing national energy security and centralized control over fuel supply. For legal practitioners, this development necessitates a thorough understanding of the evolving regulatory landscape, particularly concerning the new Petroleum Law and the revised State-Owned Enterprise Sector law. While ENAPP promises enhanced stability and state oversight, its implementation will require meticulous attention to governance, transparency, and the potential impact on market competition.

Practitioners should closely monitor the specific decrees and regulations that will detail ENAPP's operational framework, procurement procedures, and its interaction with existing private sector players. Clarity on these aspects will be essential for advising clients engaged in the Mozambican energy sector, including those involved in import, distribution, and related services. The success of ENAPP will ultimately hinge on its ability to navigate the complexities of a centralized procurement model while upholding principles of good governance and fostering a predictable legal and commercial environment.