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NOCMA, PIL owe suppliers $78 million

Suppliers against Kwacha payments

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Werani Chilenga

By Wezzie Gausi:

The National Oil Company of Malawi (Nocma) and Petroleum Importers Limited (PIL) are owing fuel suppliers a total sum of $78.3 million in volumes of fuel already uplifted on open credit.

Nocma owes suppliers $61.5 million while PIL owes suppliers a sum of $16.8 million.

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This came to light when Ministry of Energy, PIL and Nocma officials appeared before the Parliamentary Committee on Natural Resources and Climate Change in Lilongwe on Tuesday.

Secretary for Energy Alfonso Chikuni confirmed the development, saying the institutions have debt.

However, he said, the debt does not mean the institutions do not have the money to pay suppliers.

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“Both Nocma and PIL have the money in stock but the problem is that the money is in Malawi Kwacha. So, they cannot pay the suppliers using local currency.

“What we are looking for is forex for the institutions to square their debt,” Chikuni said.

He further said they are negotiating with the Reserve Bank of Malawi (RBM) to be settling debt whenever forex is available.

“We have negotiated with RBM to help us in squaring the bills slowly whenever an opportunity for forex arises. That will help the country get more fuel from suppliers,” he said.

RBM Governor William Banda said the bank has committed $50 million towards fuel purchases in the country.

He said RBM will contribute $25 million, with the other $25 million to be sourced from commercial banks.

“We, as the [central] bank, are aware that the country is going through a shortage of forex but we are hopeful that, in 2023, things will change for the better.

“Apart from fuel, we should also understand that [we have] other areas like medicine [purchases]. And fertiliser needs forex too. We are currently banking on IMF [International Monetary Fund], the World Bank and other donors to help us on the forex issue,” Banda said.

Committee chairperson Werani Chilenga said they were impressed with progress the government is making in sorting out fuel-related problems.

“We are happy that RBM has shown interest in helping out on fuel issues but it is high time the government started looking outside the box when it comes to issues of forex generation. It can, for example, encourage investments in mining and this will help the country generate forex,” Chilenga said.

Late last year, the country faced a fuel supply crisis that culminated in motorists waiting for fuel for days on end.

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