Mera upbeat on Malawi fuel’s steady supply
At a time the forex is becoming scarce bringing fears that fuel supply might be interrupted again, Malawi Energy Regulatory Authority (Mera) has assured of security of supply of the commodity on the market.
The energy regulator said the country continues to enjoy uninterrupted fuel supplies, stressing there is no need for panic as internal as well as external stockholding of petroleum products are adequate.
“There are adequate financing mechanisms for Malawi’s fuel needs. The public should ignore all speculative actions that would portray that Malawi does not have enough fuel supplies,” said Mera consumer affairs and public relations manager Fitina Khonje.
Between August and October last year, Malawi faced shortage of fuel due to forex shortage, a situation Mera indicated was making it difficult for fuel suppliers to import large volumes of the commodity.
Malawi’s import cover, now below one and a half months, has been worsened by protracted balance of payment challenges in the absence of an extended credit facility programme with the International Monetary Fund.
Currently, Reserve Bank of Malawi (RBM) figures show that gross official reserves, held by the central bank to prop up the kwacha, are decreasing and are now at $304.87 million, an equivalent of 1.22 months of import cover.
On the other hand, private sector reserves, a combination of ADBs own forex and Foreign Currency Denominated Account (FCDA) balances, are at $399.20 million, representing 1.60 months of import cover.
Economists argue that a country such as Malawi needs about three months of import cover, to ensure seamless flow of imports.
RBM Governor Wilson Banda earlier this month, however, indicated the central bank has committed $25 million (K27 billion) to supporting fuel imports for the first quarter of 2023, while commercial banks will also put in $25 million (K27 billion).
He said in the last quarter of 2022, RBM supported fuel importation with $23.8 million (K24 billion) which helped improve the fuel situation.
According to Mera data, on average Malawians use 845 000 litres of petrol and 834 000 litres of diesel in a day.
