Nocma awards 2 fuel contracts
National Oil Company of Malawi (Nocma) has awarded two fuel contracts to Addax Energy SA and Augusta Energy and is yet to finalise discussions with two other suppliers for the 2023/24 contracts.
In an interview on Thursday, Minister of Information and Digitalisation Moses Kunkuyu said the two new suppliers have already started loading the commodity and supplying to the country as per their contracts’ terms.
Said Kunkuyu: “We signed a contract with Addax on Wednesday last week and Augusta Energy on Thursday this week. On basis the companies started loading in Dar es Salaam in Tanzania and Beira port in Mozambique, respectively. We are looking at other modalities so that we also start getting supplies from Nacala port in Mozambique for a start.”
According to a notice of intention to award the fuel contracts that was issued by Nocma some two weeks ago, the remaining suppliers are HAPCO FZE which is the newest and Camel Oil which has been retained from the previous contracts.
Kunkuyu explained that the contracts are being awarded to individual contractors as such the suppliers are expected to attend to and satisfy the contract evaluation obligations differently as per their instructional set up.
There are three premiums to be used in the importation of the commodity, namely DPU, Ex-tank and Cost, Insurance and Freight (CIF), according to the notice.
CIF indicates pricing of the commodity on a delivered basis which includes the cost of oil and freight to its destination. Under Ex-tank procurement, local importers take charge of ownership of the product destined for Malawi and are responsible for in transit risks such as theft, accidents and contamination up to the internal receiving depots of oil marketing companies.
Under the DDU, the supplier assumes all the risks for delivery of the product from the external depots at the ports to various destinations. In this case, the local importer only takes charge of the products after it is delivered in the country.
Speaking at a press briefing in Lilongwe last Friday, Kunkuyu blamed the scarcity of fuel in the country on Nocma and forex shortage, arguing that the State-owned company delayed processing the 2023/24 fuel supply contracts.
According to him, if Nocma started the procurement process on time, the new suppliers could have been engaged by January this year and the fuel shortages could have been avoided.
Fuel Tankers Operators Association (FTOA) secretary Mwiza Chawinga in an earlier interview hailed Nocma for the premiums saying he is optimistic that 90 percent of the volumes will be moved by local transporters under ex-tank.
He said said 303.025 metreic tonnes (MT) out of 356 500 MT of both petrol and diesel under Ex-tank, will be moved by Malawian transporters.
Chawinga said his association’s calculations show that government may save up to $50 631 229 by the end of the contract.
Nocma currently imports 55 percent of the country’s fuel, with the remaining 45 percent imported by privately-owned Petroleum Importers Limited
