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Fuel open tender deals to end December

Minister of Energy Ibrahim Matola says Malawi Government will honour existing open tender fuel supply contracts until their expiry in September and December this year.

The situation follows the Malawi Government’s adoption of government to government (G2G) system for procuring fuel which mandates the Minister of Energy to nominate an agent or entity to import fuel without the oversight prescribed in the Public Procurement and Disposal of Assets (PPDA) Act of 2017.

On Saturday, Malawi took delivery of the first consignment of fuel procured under the G2G arrangement at Songwe Border Post in Karonga which arrived alongside open tender system volumes amid a persisting fuel crisis in the country.

When quizzed on how government will resolve the situation, Matola, who led a delegation to witness the arrival of G2G tankers, said government will meet to resolve the matter, but noted that most of the contracts will end this year.

He said: “We are not abandoning those contracts, they will be running concurrently. All we are trying to do is resolve the current fuel shortage problem and increase the volume of bringing in fuel in the country.

Matola: We are not abandoning. | Nation

“For the open tender system, the contractors who won the supply of fuel, their contracts are still on. For others it’s up to September, while to others it is up to December 2025.”

On whether it is within the revised law to combine the open tender and the G2G law, Matola said there was nothing illegal.

He said: “The normalisation of fuel depends on how these drivers will be protected, but also the shape of our roads.”

But Consumers Association of Malawi executive director, John Kapito said the key matter relates to honouring payments.

He said: “We had credit facilities, but they were frozen because we couldn’t pay them. Even the 51 million litres from Kenya, what happens if the fuel is finished because it is just for one month?

“I am very worried even with the G2G because it is run by people of a government that has interests. What will happen if we don’t pay the money? The best for us was to go back to credit lines and be paying.”

In his national address in November 2024, President Lazarus Chakwera said his administration was mooting a government to government fuel deal with the United Arab Emirates with more flexible payment arrangements to avert perennial fuel stockouts, which worsened last year.

At least about 70 percent of fuel imports come through Mozambique’s ports with Beira processing 50 percent and Nacala facilitating 20 percent while the remaining 30 percent is hauled through the port of Dar es Salaam in Tanzania.

National Oil Company of Malawi data shows that Malawi uses 1.05 million litres each for diesel and petrol per day.

The country spends $600 million (about K1 trillion) on fuel importation per year, according to the Reserve Bank of Malawi.

In total, the country needs $3 billion to meet its import requirements.

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