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Parliamentary committee splits over Nocma’s new status

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A two-day Parliamentary Committee on Natural Resources and Climate Change meeting on fuel procurement and management report that was held last week ended prematurely after disagreements ensued over the state-owned National Oil Company of Malawi (Nocma’s) new role in fuel importation.

According to inside sources, Malawi Energy Regulatory Authority (Mera) funded the two-day meeting for the legislators to discuss and adopt the report but some members, more especially those from the opposition parties, said they were not comfortable with Nocma taking over the role of bulk fuel importation.

As part of the ongoing Public Service Reforms Programme, the government has approved that Nocma should take over the role of bulk fuel importation from Petroleum Importers Limited (PIL).

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Among others, the report contains what some committee members gathered during fuel importation study tours in Zambia, Tanzania, Namibia and Botswana and their recommendations.

Ironically, apart from recommending that the government should devise a model of fuel procurement that suits the country’s prevailing economic and financial position, the report, which members were supposed to adopt and we have seen, does not indicate the committee’s stand on Nocma’s new role.

Currently, PIL, which is a consortium of four major oil marketing companies in the country, imports about 70 percent of fuel with Nocma importing 30 percent.

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The parliamentary grouping that is opposing argues that Nocma has no capacity to competently import enough fuel and the government already showed its failure in the management of Petroleum Control Commission.

The members are also reported to have said it will take a miracle for PTA Bank and the commercial banks in the country to trust the government, whose several agencies are struggling financially, with 90 days credit facility that PIL is currently using.

“Even when the committee asked Nocma officials to provide their business plan, that time they said they did not have. The Nocma arrangement opposers say it is risky to trust the government, which has many economic problems, with the crucial responsibility of importing fuel. But the DPP [Democratic Progressive Party] members just went Nocma’s way,” the source said.

The source said after a lengthy discussion, members did not agree on one thing but the committee is still compelled to meet before the report is presented in Parliament for general debate.

But chairperson for the Committee, Werani Chilenga, said there are no divisions but members will meet again for one-day to adopt recommendations that members who visited other countries made.

“We are not against the government doing anything. We are simply there to offer our oversight role. So, what we will do is that the members who travelled outside to seek information will simply recommend on what is the best model based on what they have observed.

“On whether the government will adopt that model or not, it is none of the committee’s business. Because government can implement policies, according to the constitution, the way they want,” Chilenga said.

He, however, said the committee is yet to hear from the government on how Nocma will be turned into a fuel selling company.

“Nocma was established under Company Act to manage strategic fuel reserves and not to sell the fuel. So we are yet to hear from them or the government on what is going on,” he said.

On the advantages of shifting the goal posts from PIL to Nocma, spokesperson in the Department of Energy, Josephy Kalowekamo, said the department will come up with a statement on the reasons behind the implementation of such a reform.

However, Kalowekamo said PCC did not fail but it was borne out of temporary arrangement.

“What people should know is that PCC just came in as an emergency situation. That time the private sector was not mandated to import fuel and PCC just came in to serve the situation and after things normalised PCC pulled out,” Kalowekamo said.

PIL General Manager, Enwell Kadango, told this paper that PIL has not been informed of the change and will continue doing its duty of importing fuel until advised otherwise.

But the current contract between the government and PIL is expected to end in July 2016.

Nocma spokesperson, Telephorus Chigwenembe, also said the company will release a statement on its new role.

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