Malawi’s fuel crisis has become a recurring national emergency, marked by long queues, disrupted businesses, and rising public frustration.
The dominant narrative points to foreign exchange shortages as the root cause. While forex constraints are real, they are not the full story.What Malawi is experiencing is not just a fuel shortage. It is a policy and market structure failure. Until this is acknowledged, solutions will remain temporary, reactive, and ineffective.
Myth of forex as the sole problem
It is convenient to blame forex. It shifts attention away from institutional accountability and structural inefficiencies. But consider this: even when forex becomes available, the system struggles to stabilise supply. This reveals a deeper issue, Malawi’s fuel supply chain is fundamentally weak.
Market where licensed importers do not import
Oil Marketing Companies (OMCs) in Malawi are licensed to import fuel. Yet, many are not actively participating in importation. Instead, they operate largely as distributors.
This creates a dangerous imbalance: A few players carry the burden of importation. Many benefit from distribution margins without assuming supply risk.
Limited access to forex
Restrictions on profit repatriation for multinational players. However, a licence to import must come with an obligation to import. Without this, the market becomes structurally dependent on a narrow base, making shortages inevitable.
Nocma: From strategic reserve to market competitor
National Oil Company of Malawi (Nocma) was established to safeguard national fuel security through strategic reserves. Today, that mandate has blurred.
Nocma is increasingly functioning as an oil marketing company, competing in the same constrained environment it was meant to stabilise. This shift has critical consequences:
Reduced focus on building strategic reserves, increased exposure to forex and commercial risks.
Forex competition: Imports vs profit repatriation
The fuel crisis is further intensified by competing forex demands: Nocma requires forex to settle fuel import obligations while the multinational OMCs require forex to remit profits. Both demands draw from the same limited pool. This creates a structural bottleneck where import capacity is constrained and investor confidence is eroded.
Silent risk: Inadequate storage capacity
One of the least discussed, but most critical issue is storage. Malawi simply does not have enough fuel storage capacity by the oil marketing companies. Even if adequate forex were secured today.
National reserves would only last a few days. Supply disruptions would immediately trigger shortages. This is not just a logistics issue, it is a national security risk. A resilient fuel system requires buffer capacity, not just continuous imports. The available storage capacities may not have been constructed to meet the current vehicle population and increased economic activities.
Fuel shortages ripple through the entire economy: Inflation rises as transport and production costs increase. Businesses scale down due to unreliable energy inputs
Supply chains weaken, affecting agriculture, mining and manufacturing and tourism. For example the entire farm mechanisation which relies on diesel will collapse thereby significantly affecting the mega farms that support the food reserve for the country.
Where regulation must step up
Malawi Energy Regulatory Authority (Mera) cannot remain a passive observer. There is an urgent need to strengthen regulatory discipline. Licensing must be tied to actual import participation.
To be continued tomorrow
*Hastings Bofomo Nyirenda is advisory partner and chief executive officer at Grant Thornton Consulting Limited.
