Gondwe hints on better, improved fuel situation

Government says it is taking necessary steps to improve fuel security situation in the country.

In the past, the country’s fuel storage capacity was limited to 14 days of supply held in idle tanker trucks.

But Minister of  Finance Economic Planning and Development Goodall Gondwe says the completion of fuel reserves in Blantyre, Lilongwe and Mzuzu now means the country will have capacity to hold 25 percent annual fuel capacity.

“The low level of reserves, combined with our landlocked geographical status, clearly places us in a vulnerable position that we are highly desirous of mitigating.

“To this end, we have now completed construction of three fuel storage depots capable of holding about 25 percent of annual consumption,” said Gondwe in his recent Letter of Intent (LoI) to the International Monetary Fund (IMF).

The finance minister said the new fuel storage reservoirs offer the possibility of greater assurance of fuel supply, but the management issues need to be carefully considered.

“Our current fuel import regime—based on private sector importation with cost recovery guaranteed by the automatic fuel pricing mechanism—has worked well in the past, with supply on demand available since 2012. However, with the completion of the new fuel storage tanks, an additional dimension has been introduced, as a method is required to finance the accumulation of the needed fuel reserves,” he told the IMF.

He said the challenge now will be to amend the fuel import regime in a manner that utilises the new fuel tanks without introducing new sources of risks.

Gondwe assured the country and the Bretton Woods multinational lender that over the next fiscal year, the fuel import regime in Malawi will remain unchanged, while the country will continue to carefully evaluate possible amendments aimed at enhancing security and efficiency.

Meanwhile, National Oil Company of Malawi (Nocma) says it has already started receiving fuel and dispatching it to these newly-completed strategic reserves for testing.

Nocma board chairperson George Mkondiwa told our sister paper The Nation after touring the fuel reserves at Matindi in Blantyre last week that the fuel reserves have a combined capacity of 60 million litres.

“We are excited with what we have seen and hopeful that we will not completely run out of fuel in the country,” he said. n