Parliament on Thursday adopted its Natural Resources Committee report on the dispute between Malawi Energy Regulatory Authority (Mera) and National Oil Company of Malawi (Nocma) over procurement of fuel suppliers.
The committee wants government to intervene on the wrangle which threatens steady supply of fuel into the country.
Speaking in Parliament, the committee’s chairperson Welani Chilenga thanked the House for adopting the report, saying Mera has been running a misinformation campaign which would have led to a fuel crisis in the country.
He assured the House that the committee investigated the award of contracts and found none of the companies had bankruptcy cases as alleged by Mera.
The Board of Mera in January this year also declined to approve Nocma’s application for approval of prices for suppliers, citing concerns of overpricing.
Subsequently, Mera asked Nocma to only contract selected suppliers at a price suggested by other lower bidders.
Mera argued that contracts were costly by about $50 million (K45 billion) due to the DDU procurement system that Nocma had opted for oil suppliers such as Lake Oil Group—on the Northern Corridor or the Dar es Salaam route—and IPG Oil and Gas on the Southern Corridor or the Beira route, who allegedly quoted higher premiums than other bidders.
However, Chilenga said the committee investigated Lake Oil Group deal and found no information that it is bankrupt.
He said: “Let us have trust in the government agencies. The Anti-Corruption Bureau and the Public Procurement Disposal of Assets Authority were both involved.
“Mera has been saying that Nocma will be running fuel on a cost that is $50 million more, but from findings of this committee, this is not true.”
Chilenga said publishing such wrong information by Mera could have led to wrong decision-making such as fuel formula: value of the product, cost of haulage plus costs on inland shipping, sum of costs for holding and transit losses, government levies, licence approved fees.
He further claimed that Mera depleted Fuel Stabilisation Funds by using them for construction of its new headquarters in Lilongwe.
The House has since requested the Minister of Energy to respond to the report after the 2021/22 National Budget review cluster meetings.
The majority of the lawmakers in the House backed the committee while Nsanje Lalanje parliamentarian Gladys Ganda called for ACB to investigate the awarded contracts.
Minister of Trade Sosten Gwengwe said he was disturbed by the allegation that Mera has been using funds from the fuel stabilisation.
“We need to verify these allegations,” he said.