Goodall says Malawi fuel crisis to end soon

Malawi’s fuel crisis will shortly be a thing of the past, Natural Resources, Energy and Environment Minister Goodall Gondwe has reiterated.

He stressed that Malawi Government is working tirelessly to find a lasting solution.

“We are doing something about the fuel problem and I am sure this will soon be solved. Those who are fair will agree that we have started solving that problem,” said Gondwe in his latest comment since the availability of the commodity improved over the past few weeks.

He did not say what government is doing to end the crisis only insisting that they are working day and night to find the solution to the problem.

Spot checks have revealed a slight improvement in the availability of fuel, particularly petrol in the past few weeks.

Long queues that were a common sight in the last few months in most of the pump stations have disappeared with motorists refuelling their vehicles without hassles.

Gondwe said he has all the confidence that with guidance from President Bingu wa Mutharika the situation will be a thing of the past and that Malawians will have the last laugh.

Malawi’s fuel crisis has been compounded by a huge deficit in foreign currency largely affected by a 30 percent dip in this year’s  tobacco revenue—which accounts for 60 percent of foreign exchange revenue and a donor aid freeze.

Malawi’s donors under the Common Approach to Budgetary Support (Cabs) have also not disbursed their budgetary support in the 2011/12 national budget amounting to K65 billion due to some governance concerns and the suspension of the economic programme with the International Monetary Fund (IMF).

Since the fuel crisis emerged, government has heavily relied on borrowed funds from, among others, PTA Bank and other foreign governments, to ease the acute shortages of the commodity.

Last month, Puma Energy (Malawi) Limited cautioned motorists against  panic buying of fuel, arguing that government and fuel industry players have developed a comprehensive strategy that will soon end the fuel shortages.

The comprehensive strategy to end the fuel crisis that has crippled a number of sectors, including transportation and manufacturing, involves government, the Petroleum Importers Limited—a consortium of five fuel importing companies— Malawi Energy Regulatory Authority (Mera) and National Oil Company of Malawi (NOCM).

Dr Davis Lanjesi, managing director of Puma Energy (Malawi) Limited, formerly BP Malawi, attributed the shortage of the commodity to its artificial demand on the market.

He hailed Mera’s directive to ban the selling of fuel in jerry cans as timely because the black market operators, who mostly buy in containers, have been causing shortage of the commodity on the formal market.

Currently, the combined daily demand for fuel stands at 1.124 million litres, translating to 33.6 million litres per month, according to figures from the Ministry of Finance and Development Planning.

At current prices, Malawi’s monthly fuel import bill stands at $34 million (K5.7 billion). In May 2010, the same volumes were valued at $21.4 million (K3.5 billion), which translates to over $370 million (K62 billion) annual bill for petroleum products.