Parliament allows NOCMA to award fuel import contracts

“NOCMA should proceed with the necessary administrative arrangements within the law.”

Parliamentary committee on energy and natural Resources has finally gave a go-ahead to National Oil Company of Malawi (Nocma) to proceed with awarding of contracts to fuel importing companies, which won the contracts a decision which has gone against Malawi Energy Regulatory Authority (MERA).

Making the directive at Nkopola Lodge in Mangochi, Energy and Natural Resources parliamentary committee, chair Werani Chilenga Saturday warned Malawi Energy Regulatory Authority (MERA) against creating fuel crisis in the country.

Chilenga said there is need for the fuel contract issues to be resolved once and for all to serve Malawians from the fuel shortage.

He said the contract issue started eight months and its time to have all these issue dusted.

“Based on the approval from Public Procurement and Disposal of Assets (PPDA), Anti-Corruption Bureau (ACB), Government Contracting Unit and Ministry of Justice and having interacted with NOCMA and MERA, and considering that the process to procure fuel has taken over 8 months instead of four months and the fear that the bad blood between MERA and NOCMA has the potential to cause serious fuel shortages in the country.

The Committee is of the strongest view that NOCMA should proceed with the necessary administrative arrangements within the law to proceed with the procurement of fuel and for the Committee to report the same fact and recommendation to the main House next week,” he said.

Chilenga further said the committee decided to make such a decision after noting that there is no evidence justifying the allegations that once given the contracts to earmarked companies, fuel pump prices could go upwards.

“We have been hearing different stories from MERA on these fuel contracts but there has been no evidence to support what have been talking especially on fuel pricing,” He said.

Speaking earlier on, MERA Board Chair Leonard Chikadya accused NOCMA of failing to respond to letters asking for a number of issues which include prices offered by the companies awarded the contract.

NOCMA IS responsible for fuel importation management of the Strategic Fuel Reserves (SFRs) and distribution of fuel products (Diesel and Petrol) through Marketing Companies (OMCs) which draw 50% of their fuel product from the Strategic Fuel Reserve.

Since its first imports in 2012, NOCMA has progressively grown in its import market importing more volumes over the years and to date can be said to be the major importer of fuel products in Malawi, importing an average of 607% of national fuel import in 2020.

NOCMA is regulated by the Malawi Energy Regulatory Authority (MERA) and has obligations that are found in various pieces of legislation, regulations and policies.

Some of regulations and policies providing legal guidance for NOCMA’s operations include Liquid fuel and gas (Production and Supply) Act of 2004, Liquid fuel and Gas Amendment of 2017, Strategic Fuel Reserves Regulation 2017, Energy Regulation Act 2004 and Energy Energy policy.