Petroleum Importers Limited (PIL) has unveiled plans to sign an agreement with a supplier this week to be paid in the local currency for fuel imports.
While keeping the name of the company under wraps pending the signing ceremony, PIL general manager Martin Msimuko in an interview last week said the deal is a one-off arrangement, but could be sustained depending on the implementation.
He said the agreement will see 35 million litres of fuel purchased.
Said Msimuko: “We are currently talking of 20 million litres of petrol and 15 million litres of diesel. This is once-off for now and if successful we will repeat. If all goes well [the deal will be signed] by end of next week.”
The arrangement comes amid erratic availability of fuel on the local market in the past two years due to shortage of foreign exchange.
Malawi Energy Regulatory Authority (Mera) chief executive officer Henry Kachaje confirmed the PIL arrangement and conceded the process was not as easy.
He said: “The last time we followed up, they had one who had seriously indicated willingness to purse that and we gave them a go-ahead to negotiate and do some due diligence. As I am speaking, they have not yet concluded that process.”
However, both Kachanje and Msimuko could not yet provide details on the envisaged deal, especially on how payment will be paid, apart from mentioning that it will be done in the local currency.
During a press briefing on the fuel situation in the country in Lilongwe last week, Minister of Information and Digitisation Moses Kunkuyu was also hopeful on the PIL deal.
Meanwhile, economist Milward Tobias has said the arrangement would be a huge relief especially as the Malawi economy does not have sufficient foreign exchange in supply.
However, one economist who did not want to be mentioned said such arrangements, sometimes, entail that the supplier wants to open up investments and does not want to get money from elsewhere, but use the local currency.
Malawi requires $3 billion per year to meet import requirements, but only produces about $1 billion, according to Reserve Bank Malawi data.
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