National Oil Company of Malawi (Nocma) says the Government to Government (G2G) fuel procurement arrangement has so far cut costs by about $100 per metric tonne (MT).
Nocma spokesperson Raymond Likambale said in an interview yesterday that the G2G arrangement with two companies from Oman and United Arab Emirates (UAE) was proving more cost effective than the current system.
He said: “From OQT of Oman, the cost, insurance and freight [CIF] premium for diesel is $77.17 per MT while for petrol it is $69.89 per MT.
“However, the main supplier [under the current tender-based procurement] has CIF premiums for diesel at $175.71 per metric tonne while petrol is at $185.90 per metric tonne. This can show you how cost-effective the G2G arrangement is for the country.”
The revelations come as the first two vessels carrying fuel from OQ Trading of Oman and Abu Dhabi National Oil Company (Adnoc) in the UAE are expected to arrive at the Tanzania port of Tanga between July 9 and 12 while those at Beira in Mozambique will dock between July 14 and 16.
“The fuel from Mozambique will come into Malawi by rail while that from Tanzania will come by road,” said Likambale.
Transporters Association of Malawi spokesperson Frank Banda yesterday said they are yet to start sending trucks to Tanga for the new consignment as they were still hauling about 16 million litres bought on open tender.
“We sent 80 trucks, the rest are from Tanzania to haul the 16 million litres into the country. We are yet to make new arrangements, but discussions are ongoing so that we haul the new consignment under the G2G,” he said.
Earlier, Consumers Association of Malawi executive director John Kapito said key on the matter is honouring payments.
“We had credit facilities, but they were frozen because we couldn’t pay them. I am very worried even with the G2G because it is run by people that have private interests,” he said.
The fuel deals signed with the OQT of Oman and Adnoc mark the first G2G fuel purchase for Malawi as it comes directly from companies that extract and process fuel.
It is different from last year’s arrangement, where Malawi procured 40 000MT, an equivalent of 51.5 million litres, of a combined cargo of diesel and petrol from the UAE under the Kenya bilateral arrangement.
Nocma and Petroleum Importers Limited are each supposed to import 50 percent of the country’s required volumes, but Nocma has of late been importing about 80 percent of total stocks.
Nocma data show that Malawi uses one million litres for petrol and 850 000 litres of diesel on a daily basis, translating to a combined 55.5 million litres a month.
Malawi 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 against earnings of $1 billion.
