Fuel demand up by 23.5%

Demand for fuel in the country has increased between January and July this year from 1.7 million to 2.1 million litres per day for diesel and petrol, National Oil Company of Malawi (Nocma) data shows.

The 23.5 percent increase in demand comes amid scarcity of foreign exchange that has forced State agency Nocma and privately-owned Petroleum Importers Limited (PIL) to struggle to bring the commodity in the country.

In an interview on Monday, Nocma director of operations Micklas Reuben said available resources do not meet the country’s current daily fuel demand.

He said the demand for petrol and diesel was now the same, meaning that 1.05 million litres of each product are needed daily.

Said Reuben: “In August this year, Nocma alone imported 42 million litres of fuel while PIL brought in 22 million litres, making a total of 64 million litres.

“But as we were finishing the month of August, we had no fuel stock in our strategic fuel reserves. Even if we had imported 70 million litres of fuel as a country, I don’t think we could have matched the demand.”

He said Nocma is striving to ensure that it gets more than two million litres per day while building stock levels in its strategic fuel reserves.

“Apart from Nacala [port in Mozambique], Nocma has made progress towards commencement of transportation of fuel by pipeline from Beira to Feruka and Masasa in Zimbabwe where we will load and haul the volumes by road. The diversification of transportation modes is a game-changer in fuel supply,” said Reuben.

On Monday, Nocma received a block train of 39 wagons carrying about 1.9 million litres of diesel from Nacala Port in Mozambique.

Reuben expressed optimism that with the importation of fuel through rail, the situation would be stabilised soon.

Malawi Energy Regulatory Authority (Mera) data shows that Malawi was using 845 000 litres of petrol and 834 000 litres of diesel per day.

In the past two years, Malawi has been reeling under an acute foreign exchange shortage due to supply and demand imbalances on the domestic foreign exchange market largely, evidenced by low forex supply, declining official foreign exchange reserves and widening spread of rates on the market.

Mera, Nocma and PIL have attributed the perennial shortages of fuel in the country to shortage of foreign exchange.

In its April 2022-March 2023 Mera Highlights publication, the regulator said consumption of diesel and petrol jumped by 35 percent and 25 percent, respectively between the 2021/22 and 2022/23 financial year.

Mera said during the period under review, the country consumed 379.69 million litres of diesel, a jump from 254.16 million litres in the 2021/22 financial year. On the other hand, petrol consumption rose to 449.66 million litres in the 2022/23 financial year, an increase from 302.80 million litres the previous financial year.

Meanwhile, Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni attributed the increase in fuel demand to the continued importation of vehicles into the country.

He observed that most of the country’s public transports are not reliable particularly in cities, forcing Malawians to buy more personal cars.

Statistics show that about 30 vehicles are imported into the country every day.