Fuel imports worsening trade balance—report
The fuel import bill continues to worsen the trade balance as Malawi imported $41.4 million (about K72.5 billion) worth of fuel in May this year, raising the trade deficit to $238.5 million (about K417.6 billion).
The deficit, according to figures contained in the Reserve Bank of Malawi (RBM) Monthly Economic Review for May 2024, is higher than minus $181.8 (about K318.3 billion) recorded in April and minus $207 million (about K362.4 billion) recorded in the corresponding month in 2023.
The data shows that at $41.4 million (K72.5 billion), fuel imports were more than total exports recorded at $37.7 million (about K66 billion) in May from $31 million (about K54.2 billion) the previous month.
Reads part of the report: “Exports improved following increases in the sales for macadamia nuts, tea and cotton of $3.2 million [about K5.5 billion], $7.9 million [about K13.8 billion] and $0.3 million [about K0.5 billion] amid a tobacco exports decline.”
In an interview yesterday, Sky Energy Africa founder and managing director Schizzo Thomson, whose firm imports electric vehicles (EVs), said it is high time authorities started preparing for alternatives to fuel to save foreign exchange by promoting adoption of EVs.
He said by taking advantage of local renewable energy sources such as solar and wind to charge EVs, Malawi can enhance its energy independence.
“This could reduce vulnerability to global oil price fluctuations and supply disruptions,” he Thomson.
In a separate interview, Ministry of Energy chief energy officer Austine Theu said government’s policy is already leaning towards adoption of EVs and increased production of ethanol for blending with petrol as alternatives to reduce fuel imports.
On ethanol, which is already being produced by Press Corporation subsidiaries PressCane Limited in Chikwawa and Ethanol Company in Nkhotakota, he said there are still production capacity challenges which are being worked on to meet the blending objective of 80 to 20 for petrol and ethanol.
“The available ethanol is only able to meet less than 30 percent of total ethanol demand of which fuel ethanol is just one part,” said Theu.
He said the ministry is currently reviewing the National Energy Policy of 2018 which will, among other things, provide clear guidance on the energy food land nexus to catalyse investments in the biofuels industry.
On average, Malawi uses 1.05 million litres each for diesel and petrol per day, according to National Oil Company of Malawi data, spends $600 million (about K1 trillion) on fuel importation per year.
