Fuel woes impacting heavily on Malawi economic recovery

Fuel shortages in Malawi could weigh on government’s economic recovery plans by reducing production at farms and firms that rely on diesel fuel for power, an economist  observed.

Malawi’s electricity supply is unstable and many firms use diesel generators for power, but the country continue to experience critical shortages of fuel as queues at petrol stations continue.

The acute fuel shortage is paralysing operations in heavy industries and inconveniencing motorists.

Queues of traffic snaked past petrol stations around Malawi from last week  as the fuel shortage has led to increases in transport costs and food prices reminiscent of the late president Bingu wa Mutharika’s days when fuel shortages in 2010 and 2011 cost the economy an estimated K111 billion.

Seeking for fuel

“The shortage of diesel has a major negative impact on production. The fuel shortage will impact negatively on agriculture, which is our mainstay, as transportation of produce to markets and distribution of fertilisers is compromised,” an economist  Arnold Pundi  pointed out.

Minister of Energy Cassim Chilumpha and Finance Minister Ken Lipenga  have said Malawians should for now get used to fuel shortages until early next year when the situation is expected to improve.

Chilumpha attributed the situation to the season right now, arguing that the Malawi economy driven by agriculture is unable to generate enough foreign exchange to purchase the commodity.

“Our economy is agriculture dependent and that means we only get more forex during the harvesting season which in this case will be next January or February when we will be harvesting our agriculture products,” Chilumpha said.

Lipenga said erratic fuel supply  will continue because the country’s international suppliers do not still have confidence in the economy.

Malawi Fuel Watch group on Facebook is also becoming lively once again as desperate motorists  are asking where to get fuel.

But President Joyce Banda is optimistic  says fuel supplies will normalise from December to April next year following a US$250 million (about K80 billion) agreement signed between the government and PTA Bank to provide a facility for purchasing fuel.

“Shortage of fuel was due to logistics and forex shortage. But Malawi has reached an agreement with the PTA Bank which will provide millions of dollars for fuel supply,” said Banda in a speech monitored on state controlled Malawi Broadcasting Cooperation (MBC) at a news conference that was conducted at Kamuzu Palace in Lilongwe upon her arrival from a Comesa summit in Uganda.

 

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