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Mera annoys fuel hauliers

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Henry Kachaje

The country’s fuel transporters Wednesday reacted angrily to the decision by the Malawi Energy Regulatory Authority (Mera) to discontinue the payment for transport brokerage for all fuel importers from January 1, 2023.

The transporters argue the move will not help at all in improving the supply of fuel in the country let alone cut pump prices.

They also claim the move will result in the collapse of small transporters while promoting big ones.

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Mera’s decision has been announced at a time the brokerage fee stands at K2.40 per litre of fuel imported via the system.

In a leaked letter dated November 2, 2022, to heads of fuel retailing firms and the National Oil Company of Malawi (Nocma), Mera Chief Executive Officer Henry Kachaje said the decision to stop payment for transport brokerage was arrived at following a review of the supply chain that has evolved over time and the introduction of other cost effective operational arrangements with less burden on the consumer.

Kachaje said all importers are advised to employ in-house arrangements or other methods deemed efficient without passing on the costs to the pump on imports transport arrangements.

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“Effective 1st January 2023, therefore, transport brokerage commission shall no longer be a recoverable cost under handling charges in the price build-up of petroleum products,” Kachaje said in the letter.

Currently, fuel transporters in the country work under a brokerage arrangement managed by the International Haulage Brokers (IHB).

The transporters are accusing Mera of trying to hoodwink Malawians by avoiding real issues that are choking supply of fuel into the country as well as keeping the prices of fuel in the country elevated.

They further state that instead of addressing the real issues affecting fuel supply and costing in the country, Mera has opted to touch on insignificant matters which apparently cannot help bring down fuel prices.

Spokesperson of the transporters, Smart Kaluwa, said the K2.40 per litre brokerage fee is too insignificant and immaterial to impact on the fuel pricing in the country.

Kaluwa cited an example that with petrol now selling at K1,746 per litre and diesel at K1,920 per litre, removing a K2.40 per litre could bring the price of petrol at K1,743.60 while that of diesel could come to K1,917.60.

He said there are real issues that are ballooning fuel pump prices such as the various fuel levies that Mera need to address if it is sincere about bringing down the cost of the commodity in the country.

“Again another issue that is of real concern is the continued use of foreign transporters who are draining our already dry forex reserves. We are paying about $4,500 for each foreign fuel tanker bringing fuel into the country. That is madness.

“Malawian transporters have been crying every asking that they should be importing the fuel and be paid in kwacha so that we can save forex for the procurement of other commodities such as fertiliser and drugs but nobody appears to be listening,” Kaluwa said.

Zayne Osman, Director of a transport company called Otrans, said Mera’s decision was as good as killing smaller operators.

Osman claimed that the business will only be done by perhaps five or six of the bigger operators or foreigners.

“The role of the broker is coordinating all movement of fuel. Perhaps Mera should be given the latest brokerage bid document by [Petroleum Importers Limited] to see for themselves the tasks that the broker is supposed to perform and then make an informed decision as to the safety of fuel whilst in transit and also the continued participation of the smaller Malawian tanker operators in this business,” he said.

IHB’s General Manager Chrispin Mussa was not immediately available for comment Wednesday.

In a report presented to Parliament last year, on the procurement of fuel by Nocma and Mera’s role, the Natural Resources Committee made several recommendations including the dissolution of IHB.

But the High Court sitting in Zomba granted an injunction to 20 transporters who do not want the committee to proceed with its recommendations to the Ministry of Energy to dissolve IHB.

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