Chakwera’s Govt-to-Govt fuel procurement strategy passed into law despite opposition warnings
Parliament on Tuesday passed the Liquid Fuels and Gas (Production and Supply) Act (Amendment) Bill, paving the way for government-to-government fuel procurement. While the government insists the move will stabilize fuel supply and cut costs, the opposition has warned it could lead to financial abuse and unchecked ministerial power.
The amended Act removes government-to-government fuel procurement from the oversight of the Public Procurement and Disposal of Assets (PPDA) Act of 2017. It allows the Minister of Energy to appoint agents or State entities to handle procurement without adhering to traditional tendering processes.
Section 5(6) of the amended Act now explicitly states:
“The Public Procurement and Disposal of Public Assets Act shall not apply to the government-to-government fuel supply arrangement.”
Minister of Energy Ibrahim Matola said the amendment eliminates intermediaries, allowing Malawi to purchase fuel directly from oil-producing countries and refineries such as those in Saudi Arabia, Oman, and Bahrain.
“The fuel will be cheap once the middlemen are taken out of the picture,” Matola assured Parliament.
He also confirmed that Petroleum Importers Limited (PIL), a consortium of private oil marketing companies, will still supply 40% of the country’s fuel in accordance with the law.
The Democratic Progressive Party (DPP) and the United Democratic Front (UDF) strongly opposed the amendment, citing fears of abuse and lack of accountability.
Bright Msaka, the DPP spokesperson on legal affairs, accused the government of creating loopholes for corruption.
“This will place the minister above the law and create room for public officers to steal,” he said.
Esther Jolobala of the UDF argued that the fuel crisis stems from persistent foreign exchange scarcity rather than procurement inefficiencies.
“Even if we have additional legislation, how are we going to pay the other governments if we don’t have forex?” she asked.
President Lazarus Chakwera has championed government-to-government deals, asserting that they will secure better payment terms and lower prices. Malawi is already preparing to leverage Kenya’s procurement system to source fuel from Saudi Aramco, Abu Dhabi National Oil Company, and Emirates National Oil while setting up its own arrangements.
Despite government assurances, critics remain skeptical. Msaka highlighted the risks of concentrating procurement power in the hands of one minister, while political analysts have warned that removing PPDA oversight could lead to corruption.
While the government believes government-to-government procurement will solve Malawi’s fuel crisis, opposition leaders and analysts have expressed doubts about its transparency and effectiveness. With the law now in place, all eyes will be on its implementation and impact on the country’s perennial fuel shortages.
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