By Cathy Maulidi:
There was a heated debate in Parliament Thursday as the opposition side of the House demanded that the government explain why the fuel levy being collected by fuel suppliers is not being remitted to the government for road maintenance.
The opposition side demanded to know where fuel levy monies were going since roads were not being rehabilitated.
“We, on the opposition side, are not happy because fuel suppliers are not remitting the money they collect from the fuel levy to the government for the purpose of maintaining roads,” said opposition Democratic Progressive Party (DPP) lawmaker for Thyolo Central, Ben Phiri.
Phiri added that they wanted a detailed report from the Minister of Transport on what was happening, indicating that it was against the law.
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“It is a law that the money from the fuel levy be remitted to the government for the sole purpose of road maintenance. So we are not satisfied with what the minister [Jacob Hara] is saying, and we want him to bring into this House a ministerial statement. They should tell us whether we should continue paying the levy,’ he said.
According to Phiri, the money must go to the government for road maintenance, or else the government should remove the levy.
“Take out the fuel levy or maintain our roads,” he said.
In his response, Hara admitted that most of the road maintenance works had not been going on well.
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“This year, we haven’t received a single penny from the fuel levy because the retailers have not been remitting the fuel levy, though they collect it. The main problem started when the Kwacha was devalued. The realignment meant that we needed to realign the fuel prices with the margin that the Kwacha was devalued [with] but we thought that would be catastrophic because Malawians were going to cry.
“Because we wanted to cushion Malawians from such hardship, the government decided to maintain the fuel price. So, this meant that the landing costs didn’t match the pump prices. So, despite the fact that retailers are collecting the levies on paper, they don’t have the resources to remit because the actual figures do not speak to what they collect from the pump price, and it happens that we are owing them a little more than what they are supposed to remit,’ Hara said.
However, Hara told the House that the government was looking for solutions to the issue, adding that increasing fuel prices was not part of the solution.
Weeks ago, the Malawi Energy Regulatory Authority (Mera) said it was not collecting road maintenance levy in the fuel pump price build-up because importers were using the same as compensation due to low fuel prices of fuel in the country.
Fuel importers are obliged to remit the levy to Mera, which has to submit to the Roads Fund Administration (RFA) to finance road maintenance.
The ongoing compensation arrangement, although outside the law, is apparently aimed at cushioning consumers from a recommended increase in fuel pump prices.
