By Wezzie Gausi:
National Oil Company of Malawi (Nocma) has come under fire for paying lip service to the expansion of its strategic fuel reserves (SFR).
Nocma has been promising to double the capacity of the SFRs from 60 million litres to 120 million litres and it further made the commitment last year to the Parliamentary Committee on Defence and Security.
Nocma said expansion would be done by March 2025. But our findings show that expansion project is yet to start.
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The Economics Association of Malawi (Ecama) has since expressed worry over the continued delays by Nocma to build the additional fuel reserves.
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In an interview Ecama Vice President Bertha Chikadza said it is worrisome that although in 2022, Nocma reported that fuel demand has increased from one million litres a day to 1.7 million litres, which might have increased further in 2023, the government through Nocma is yet to build the additional oil reserves.
“Strategic reserves are important to mitigate any possible risks of, say, the macroeconomic environment. Where there seems to be no movement becomes worrisome for the country. We may run into the risk of having no fuel when we have unfavourable macroeconomics like the one we faced last year,” Chikadza said.
Nocma Deputy Chief Executive Officer Micklas Reuben said processes are underway to build the reserves.
“Soon, Nocma will be procuring a contractor to construct additional storage facilities in the country,” Reuben said.
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Parliamentary Committee on Natural Resources and Climate Change Chairperson Werani Chilenga said the committee does not think it is possible to have the reserves ready anytime soon.
He said the current reserves were constructed through a loan and as of now, the committee has not seen any funding approval by either parliament or other services to do the expansion of the Nocma facilities.
“Until we are sure that Nocma has funding for the expansion of fuel reserves, we will continue to raise eyebrows at the viability of increasing fuel capacity in the country,”Chilenga said.
From June to date Nocma has imported 182 million litres of fuel. On average Nocma imports 60 percent of the total national fuel imports.
The current SFR has the capacity of 60 million litres with Lilongwe depot keeping 25 million litres, Blantyre depot keeping 25 million litres and Mzuzu depot keeping 10 million litres.
