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Committee to intervene on fuel importation role

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By Wezzie Gausi:

The National Oil Company of Malawi (Nocma) has asked the Parliamentary Committee on Natural Resources and Climate Change to intervene on a debate to have a 50:50 fuel importation deal with Petroleum Importers Limited (PIL).

The firm has argued that the arrangement was a breach of the rules and regulations governing the industry.

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Nocma Deputy Chief Executive Officer, Helen Buluma, said it is high time the government considered their proposal as the company remains a large entity with biggest oil reserves in the country.

She said the 50:50 agreement is contrary to the country’s rules and regulations for the liquid fuels and gas production and supply, therefore, there was need for consideration.

“The regulations are clear that any fuel importer in the country should have storage facilities. Our analysis of the current set-up in the fuel industry shows that PIL does not have such facilities. If the 50:50 agreements stand, we will be complicit in the breach of the regulations. As a government entity, we cannot be part of that process.

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“So today we are delighted that the committee has finally visited the premises and we believe a positive result will come out of this meeting,” Buluma said.

Chairperson of the Parliamentary Committee on Natural Resources and Climate Change, Welani Chilenga, promised to take up the matter to relevant authorities.

He said they are impressed with how the company has stood the taste of time having been able to supply fuel nonstop despite the Covid-19 pandemic.

“We will be engaging with both parties to review the situation as fuel is the hub of the economy. Storage is crucial in the fuel business and if Nocma’s argument is really on storage then maybe this is the right thing to do but still the idea of having one fuel importer is risky bearing in mind that fuel is a strategic commodity,” Chilenga said.

The wrangle between PIL and Nocma dates back to 2013 when PIL accepted to take up to 10 percent of national volumes from Nocma.

This was on condition that Nocma imports the fuel and sells it to PIL.

PIL would then sell it and get a 25 percent commission on the import margin that Nocma was to earn on the volumes.

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