Fuel crisis panick buying to end soon—Goodall

Malawi’s Natural Resources, Energy and Environment Minister,  Goodall Gondwe, says government is getting close to finding a lasting solution to the erratic fuel supply in the country.

Gondwe says government is in the process of adopting the Zimbabwe model—whereby multinational oil companies such as Puma Energy and Total are allowed to import fuel directly using their offshore accounts.

Said  Gondwe , according to a report in Tuesday’s edition of The Nation: “We are nearer to finding a solution to the fuel problem. We  are adopting the Zimbabwe model where we are involving our big oil companies.”

Goodall: Gives hope to panick-buying motorists

The report said Puma and Total Malawi Limited had not yet commented on the development at the time of publication.

According to the report , Gondwe sounded confident that this is the only way Malawi can manage to bring in fuel and sustain demand in the current environment.

Fuel shortages date back to 2008 but became more pronounced in Malawi in late 2009. They have reduced production in industries and resulted in many people losing jobs as companies cut their costs to survive.

Malawi needs about USD300 million (about K50.1 billion) annually to meet its fuel imports, a daunting task for an economy that relies on tobacco whose earnings have been dwindling.

Shrinking support from Western donors, who have withheld their budgetary support to Malawi due to governance concerns, has also worsened the country’s foreign reserves’ position.

The result has been the rising social tension, which last July led to unprecedented nationwide demonstrations in where at least 20 people were killed by police.

According to the paper, economic commentators also fear that if the forex crunch continues, more basic commodities such as bread will become much expensive because Malawi imports wheat flour at an estimated annual bill of USD80 million (about K1.3 billion), which government can no longer afford.

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