Business Unpacked

Denial won’t resolve the perennial fuel scarcity

It is two weeks now and counting since the problem of fuel scarcity resurfaced in the country in full throttle, disrupting business in the process.

The reality of fuel supply challenges is that individuals and businesses alike are affected regardless of whether one owns a car or a motorcycle.

Motorists spend most of their time they would have invested in doing other economically gainful ventures to searching for the fuel to keep going.

On the other hand, passengers are on the receiving end as operators of commuter services such as buses, taxis or motorcycles take advantage to increase the fares on the pretext that they are accessing the commodity at higher prices from parallel markets or indeed factoring in the time lost on queues.

From around late 2020 when the fuel shortages became more pronounced, low foreign exchange level has been a major contributing factor as local importers have struggled to pay foreign suppliers of the commodity.

The situation led to the depletion of fuel reserves because the National Oil Company of Malawi (Nocma) had taken ages to create a buffer of at least three months.

By Tuesday this week, October 22 2024, fuel stocks data from Malawi Energy Regulatory Authority (Mera) indicated that the stocks were enough for less than a day for both petrol and diesel from 4.9 days for petrol and 15 days for diesel on October 1. On the same day, 347 service stations nationwide had no petrol while those without diesel stood at 155 and there were planned deliveries to 73 service stations for petrol and a paltry 20 for diesel.

In terms of volumes delivered, 511 500 litres of petrol and 142 400 litres of diesel were off-loaded to service stations, according to the Mera data. Mind you, this is against daily requirements of one million litres for each of the products, notably petrol and diesel.

What is clear in the fuel crisis is that, as a country, we are living hand-to-mouth, from the ports, the fuel is taken to the service station tanks where desperate and frustrated consumers get it pumped into their motor vehicle tanks. Not a healthy situation, I must say.

Until the government becomes serious in the manner it manages the economy in general, this is bound to be a recurring scenario for a long time. Remember, the challenges have been more pronounced since December 2022 and there does not seem to be an end in sight.

Dealing with the situation demands strict enforcement of the Public Finance Management Act where those found in contravention face the law to account for every tambala so abused.

But then such enforcement works where duty-bearers are serious and exude high levels of integrity, not where some play to the camera to be seen as fixing things when behind the scenes they are looting en masse. It is like a doctor giving prescriptions yet someone is stealing the medicines, leaving the helpless poor patient in a dire situation.

Recently, the Arab Bank for Economic Development in Africa (Badea) agreed to renew the $50 million facility Nocma secured back in October 2022. This money should be accessible to Nocma within the coming weeks.

In an ideal situation, the Badea facility should have given Malawians a flicker of hope that the fuel situation is destined to improve.

But with Nocma owing fuel suppliers $70 million for fuel drawn on open credit, that is without letters of credit (LCs), the facility may end up going towards repayment of this credit and $25 million will still be outstanding.

Truth be told, the situation doesn’t look good and it pains to see authorities such as Nocma trying to play it down with statements such as “3.9 million litres of diesel, petrol hauled” or “1.6 million litres of petrol in transit”. These volumes are enough for two or so days.

What is needed is finding a lasting solution, not burying heads in the sand like an ostrich by playing mind games. Surely, that won’t end the fuel woes.

For today, let me stop here and go hunt for fuel. Hopefully, I will be lucky to refuel.

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