The Petroleum Importers Limited (PIL) says it has no plans to stop bulk fuel importation for the country unless it is officially told so by the government.
PIL board chairperson, Zubeir Bhana, said yesterday that there has not been any official communication made to PIL by the authorities that bulk fuel importation for the country will be moved away from the company.
“PIL’s goal is to maintain security of supply in the country and in the absence of official communication, it is business as usual,” said Bhana.
“We intend to float tenders end of first quarter 2016, as our current contractual volumes will exhaust June 2016,” he said.
Ministry of Energy spokesperson, Joseph Kalowekamo, told The Daily Times a few weeks ago that that government, through the Public Sector Reforms Commission, has finally given approval for state-owned National Oil Company of Malawi (Nocma) to take over the role of bulk fuel importation for the country.
Nocma would, however, have to wait for a review of the Energy Policy and the Liquid Fuels and Gas Act for the decision to be backed by law although the company has already floated tenders inviting suppliers of fuel for distribution in the country.
Bhana, however, said if such a change would be made, it will be “an interesting scenario” as it will mean the government becoming a player in the industry it also regulates.
“How is it possible for one to participate in the industry and regulate at the same time?” wondered Bhana.
He said in any case, PIL has been handling fuel importation for the past 15 years and that the system “has worked brilliantly” for the nation.
“We at PIL fail to understand as to why there is a need to fix a system which is not broken,” said Bhana.
“PIL was born after the PCC [Petroleum Control Commission] saga with the recommendations of
World Bank and IMF, who at the time felt that the private sector are the best to handle the strategic product which is considered the backbone of the country,” said Bhana.
He said it is the private sector that is renowned for efficiency, accountability and transparency.
Bhana said performance of PIL is evident for itself as since 2000 when it started importing fuel for Malawi, there have been very few disruptions in the fuel supply up until the crisis experienced between 2010 to 2012.
“I like to refer to the fuel supply equation as simple as “no forex, no fuel”.
On threats posed by the absence of fuel reserves among private sector players to fuel supplies, Bhana said it is important to understand that reserves facilities of the industry today were the same between 2000 and 2010.
“And yet we had smooth supply,” he said.
Malawi’s demand for fuel has decreased by 30 percent the past few years due to various factors and we do not see why with current storage capacity we should have any interruptions,” he argued.
“With almost 400 million litres storage capacity in Beira and 400 million litres in Dar-e-salaam, there is huge volumes of fuel at the ports at our disposal and traders are ready to supply. With correct planning, the country can have smooth supply unless Malawi experiences a diplomatic standoff with both neighbours Tanzania and Mozambique at the same time,” said Bhana.
Asked what happens to PIL should government insist on shifting to role to Nocma, Bhana said the consortium is positive that government is not in a drive to kill the private sector.
“Surely, there will be consultations on role of PIL to continue in the industry. As a nation we do not want to send negative signals to prospective investors that there is no consideration on private sector and their level of investment, especially with the drive His Excellency [President Peter Mutharika has set out to invite foreign investors,” said Bhana.