Fuel scarcity throws Malawi economy into turmoil
The ongoing fuel availability levels have gone extremely down in Malawi to the extent the country’s largest fuel retailer has declared that it was not doing deliveries since Wednesday.
This is contained in Puma’s (formerly BP Malawi) customer updates for October 26 up to October 28, 2010 and other fuel stations do not even have the commodity despite drums, gallons and cars queued up.
The development is shrinking economic activities and transportation has fast become expensive with producers passing on the costs to consumers.
Some large transporters have even grounded over 60 percent of their fleet and local commuters have not been spared either as they are being forced to pay more in minibus and bus travels.
In Lilongwe people are being told to pay over 50 percent of the usual minibus fares which are mostly K100 and the same trend is creeping into the other cities in Mzuzu, Zomba and Blantyre.
However, in a move to smooth-out flaring tempers and public anger, government says it has availed US$3 million to the local fuel importation body.
This was confirmed by to Petroleum Importers Limited (PIL) Chairman Michael Faulkner who said the money is in its coffers and has been provided through Reserve bank of Malawi.
But this is a short-term measure as he said the money would only get the country 15 million litres of fuel to last for only 20 days.
The ongoing fuel shortage has been heavily attributed to low levels of forex reserves which technically is below the recommended 3 months of import cover.
Although latest data from RBM shows that as of October 14, 2011 country had US$444 million in forex reserves or 3.44 months of import cover, these figures largely include amounts held in personal accounts called foreign currency denominated accounts (FCDAs).
