By Kingsley Jassi:
Oil prices are rising after Israel launched an attack on Iran and reports show that there is at least a 10 percent price jump.
However, players in the petroleum industry have not drawn a response plan amid the possibility of global oil supply disruptions and price shocks, we have established.
For instance, the Malawi Energy Regulatory Authority (Mera) board is yet to meet on the issue.
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Petroleum Importers Limited (PIL) also confirmed that there has not been any engagement with the authorities to strategise on the issue.
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PIL says this will start impacting import costs from July, adding that, should that happen, it would have to affect retail prices.
PIL Chief Executive Officer Martin Msimuko said the industry was alert.
He, however, expresses worry that there was no immediate response by the country to prevent possible shocks. Msimuko said the country needed to secure cheaper oil before the prices escalate, a move that could cushion the country from shocks until the global market stabilises.
“If we had enough forex, we could’ve taken advantage of lower prices. It is possible to buy in advance and keep it for future use,” he said. Mera could not be drawn to provide a clear picture on how the regulator was handling the issue and, according to spokesperson Fitina Khonje, the board is yet to meet to make decisions on the matter.
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The brent crude price is reported to have jumped by about $10 a barrel since the start of June to a high of $78 a barrel on Friday, amid growing concerns that the conflict could take out Iran’s oil exports or reduce flows of crude from the Middle East to the global market.
Both Iran and Israel have suffered oil production facility damages and, as the war continues, there are fears the impact could grow.
With limited availability of forex, the country is in a hand-to-mouth situation, as import levels are failing to sustain demand and this is showing through growing queues at filling stations, as observed in Lilongwe currently.
