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Mera moves to avoid fuel crisis

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Martha Chizuma

As Anti-Corruption Bureau (ACB) officials continue investigating the award of fuel importation contracts by the National Oil Company of Malawi (Nocma), the Malawi Energy Regulatory Authority (Mera) has moved in to ease fuel supply concerns in the country.

With the current fuel importation contracts by Nocma ending this month, there were concerns that a delay in issuing fresh contracts could trigger a shortage of the commodity in the country, considering that Nocma is responsible for importing slightly over 40 percent of the country’s fuel.

But, in an interview Sunday, Mera spokesperson Fitina Khonje said the energy industry regulator had activated two options to ensure the steady supply of fuel.

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Khonje said Mera has waived Strategic Fuel Reserves (SFR) Regulations that require oil marketing companies to uplift 50 percent of their volumes from SFR.

She said the waiver would allow other importers to increase their monthly nominations for direct imports.

“Nocma has been allowed to uplift up to 10 percent contingency volumes from suppliers with whom Nocma has running contracts. These waivers will be lifted when Nocma finalises its new fuel procurement processes.

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“And we will be holding meetings with stakeholders to discuss other contingency measures that can be applied,” Khonje said.

On June 8 this year, the ACB stopped Nocma from proceeding to award fuel importation contracts for years 2021 and 2022 until thorough investigations into the matter are concluded.

The halting of the deals came a few days after the Human Rights Defenders Coalition wrote the graft-bursting body, demanding a probe into the deals after industry regulator, Mera, raised a red flag on the cost of transactions.

Mera had indicated that the deals could trigger a fuel price hike as they were $50 million (about K45 billion) more expensive.

“Pursuant to its powers under Section 23(1) of the Corrupt Practices Act, on 8th June 2021, the Anti- Corruption Bureau issued a restriction notice to Nocma on a contract to supply fuel under procurement number Nocma/ICB/ Fuel/2020/2021.

“This follows several complaints received by the ACB alleging irregularities and suspected corruption surrounding the fuel procurement process. The ACB has instituted investigations into the matter. Following the restriction notice, Nocma is therefore restricted from awarding the contract until the ACB has concluded the investigation or lifted the restriction notice,” ACB spokesperson Egritta Ndala indicated in a statement.

Other options that were on the table for Mera to choose from included order-spot contracts, which entail spot tenders using the restricted bidding method after obtaining all necessary approvals as well as extending the existing contracts.

On May 25 this year, the Natural Resources and Climate Change Committee of Parliament tabled a report in the august House of the deal and blamed Mera for throwing spanners in the procurement process.

In the report, committee chairperson Werani Chilenga said the committee was of the view that President Lazarus Chakwera should consider dissolving the Mera Board.

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