Malawi fuel woes to continue, says Minister Chilumpha

Energy and Mines Minister Dr Cassim Chilumpha has admitted that the fuel shortages which has started hitting motorists in the country are far from over.

Chilumpha made the confession to Malawi’s local paper on Saturday.

He said the situation is far from normalizing, there were no quick answers to problems in the fuel industry as the country grapples with “huge financial problems”

According to Weekend Nation, government has asked local oil firms to be patient as it sorts out their under-recovered money, which has now accumulated to K11.5 billion (about $38 333).

Fuel crisis in Malawi

The paper quoted Chilumpha saying: “No matter which way government goes, people will be complaining. If we decide to increase the profit margin for OMCs (Oil Marketing Companies), the average Malawian will be up in arms. My position is not very easy. We are talking with the marketing companies and it is my hope that the talks will continue.”

OMCs have warned that Malawians risk queuing and sleeping at fuel stations again if authorities further delay to release the billions in unpaid loss compensations that could shore up their working capital and avert a potential crisis

Chilumpha said: “The issue gets more complicated with importers. The previous administration was not allowing them to sell fuel at economic prices, effectively subsidising the consumers. These subsidies were not being paid out; hence, the accumulation. We are looking for ways to pay the debt as we also continue talking with them.”

While importers are pressuring government to pay for their losses, they too have failed to remit levies to government now estimated at K9.6 billion (about $3.2 million), according to the Weekend Nation report.

The delayed remittance of the levies to Mera for onward transmission to beneficiary agencies such as the Malawi Rural Electrification Programme (Marep), Malawi Bureau of Standards (MBS) and Roads Fund Administration (RFA) may have delayed implementation of projects whose funding come from fuel levies collected through the pump,the paper reported.

Fuel scarcity first resurfaced in the northern city of Mzuzu and then the capital Lilongwe before commercial city of Blantyre started experiencing shortages

Petroleum Importers Limited (PIL) said recently that the development was a result of a “ sudden surge in demand, especially in Lilongwe.”

Outgoung PIL board chairperson Dr. Michael Faulkner said they are “negotiating with various banks to avail more financial instruments to ensure that the supply of fuel remains smooth like it has been over the last three months.”

He said the Reserve Bank [of Malawi] has been very instrumental in ensuring that “we get all the support required for financial instruments.”

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