By Mcloyd Chilangiza:
Malawi is spending about $600 million per year on fuel importation alone as consumption for diesel and petrol continues to rocket.
Figures from energy industry regulator, the Malawi Energy Regulatory Authority (Mera), show that, on average, Malawians use about 50 million litres of fuel a month, an equivalent of 600 million litres per year.
Per day, Malawians use about 845, 000 litres of petrol and 834, 000 litres of diesel. And to support this level of fuel importation, the country requires $600 million per annum.
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In a response to a questionnaire, Mera Chief Executive Officer Henry Kachaje attributed the rise in the cost of importing fuel to elevated demand for fuel on the market in recent years.
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He, however, assured on sustainability in fuel supply.
Meanwhile, Kachaje has said significant strides have also been made in the industry, with Nocma installing a rail siding which can offload 25 wagons at once at Matindi and Kanengo depot.
Other oil marketing companies are in the process of rehabilitating their rail sidings to ensure substantial volumes are received by rail.
“This will complement investments made by Cear [Central East African Railways] of increasing the number of locomotives, refurbishing wagons … to increase fuel imported by rail in the country in the short term,” Kachaje said.
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In the long term, he said, the government is exploring the viability of investing in a pipeline, which is a safer and efficient means of transporting fuel.
A pipeline from Beira can pump 250,000 litres an hour into Malawi while a truck takes about seven days round trip to and from Beira to transport 35,000lts.
For instance, last week a delegation of energy sector players from the Ministry of Energy, Mera and National Oil Company of Malawi (Nocma) visited Zimbabwe for talks with a Zimbabwean company.
He said the government is contemplating constructing storage tanks in Nacala to support the strategy of increasing fuel transportation by rail
This comes as the sector has been faced with myriad risks lately, including disruptions of road and rail infrastructure which has necessitated a need for diversity in import options and routes.
“To mitigate these risks, the government, through the National Energy Policy, stipulates that Malawi shall diversify its fuel importation routes and import by road 50 percent of its fuel from Beira and 30 percent from Dar es Salaam and 20 percent by rail from Nacala.
“The industry further identifies alternative routes to ensure security of supply in case any of the ports of Beira, Nacala and Dar es Salaam are inaccessible. These alternative routes include accessing fuel through the pipeline from Feruka in Mutare and Masasa in Harare, Zimbabwe, Ntwara in Tanzania,” Kachaje said.
He said supplier diversification remains key to sustain supply of fuel in the country.
According to Kachaje, the industry is also improving the production capacity of ethanol, which is blended with petrol at 20 percent.
“In addition to improving fuel quality due to blending, the use of ethanol for blending reduces the country’s reliability on imported petrol by 20 percent substituting it with locally produced fuel. This also reduces the forex required to support fuel importation,” he said.
Malawi is land-linked depending on the ports of Beira and Nacala in Mozambique and Dar es Salaam in Tanzania to import its fuel. The Liquid Fuels and Gas Act stipulates that the country must keep at all times 90 days stock of fuel of which 60 days must be kept at the strategic reserves and 30 days at oil marketing companies.
