President Lazarus Chakwera says the Malawi government has now embarked on a process of transitioning from the open tender system to a government to government in the procurement of fuel.
In his Wednesday evening public address, Chakwera said a Coordinating Committee chaired by the Ministry of Energy instituted three weeks ago, will facilitate all aspects of this policy.
It will also include Ministries of Finance, Trade and Industry, Justice, the Reserve Bank Of Malawi, National Oil Company of Malawi (NOCMA) and the Malawi Energy Regulatory Authority (MERA).
The President attributed the six week fuel disruptions to forex woes the country has been grappling with.
He was quick to acknowledge this is only a short term solution as Petroleum Importers Limited (PIL) and NOCMA continue facing challenges in accessing forex in the open tender system in importing fuel which led to fuel supply disruptions in the past 20 years.
“And it is time for us to take a different approach for this reason, my administration has decided to begin the process of transitioning Malawi from the open tender system for procuring fuel to a government to government arrangement that will make our access to fuel more secure through better payment terms and cycles”
During the address, he announced his pending trip to the United Arab Emirates in a bid to find a long lasting solution to Malawi’s fuel woes.
“As a first step in pursuing this, I have accepted an invitation from the President of the United Arab Emirates to visit him in Abu Dhabi next week at his own government’s expense to discuss this and other matters for the long term fuel security of our country” he disclosed.
In August this year, NOCMA raised $23 million while in September and October, less than $20 million was raised which increased its debt to suppliers to $72 million.
According to Chakwera, this resulted in a 10 day suspension in NOCMA’s access to fuel imports consequently creating the snaking fuel queues witnessed over the past 6 weeks.
He acknowledged the long days and night’s people endured at gas stations causing disruptions to lives, work and businesses.
The President indicated that at the very start of the crisis, he instructed Treasury to contact partners such as BADEA which provided a $50 million revolving credit facility.
He said he also engaged the central bank to wrap up efforts to access more forex through commercial banks which have enabled NOCMA and PIL to bring the fuel that is currently being made available.
Chakwera hailed the public’s patience and resilience during the 6 weeks crisis as meetings were being held in the night to resolve it.
