Airlines shunning Malawi fuel pumps over high prices
Major airlines connecting Malawian travellers across the region no longer refuel their planes in the country’s main international airports of Lilongwe and Chileka due to high fuel charges.
Ethiopian Airlines and even the country’s sole flag carrier, Malawian Airlines, are both said to prefer procuring their jet fuel elsewhere, mainly in neighbouring countries.
In a letter Weekend Nation has seen addressed to the Secretary for Treasury, Newby Kumwembe, dated May 29 2014, Malawian Airlines chief executive officer Kassimu Geresu has asked government to intervene to make Malawi jet fuel price reasonable.
“Jet fuel price in Malawi is very expensive and note that no airline can survive, let alone be profitable at a such price,” reads in part the letter.
Malawian Airlines public relations officer Maganizo Mazeze said the company has been complaining to government authorities to intervene and promised they will not stop until something is done.
“We have been lodging our complaints to the government and we will not stop. If we compare with other countries in the region jet fuel price is almost 100 percent higher. It is even cheaper in a conflict ravaged country of South Sudan. Our airline can hardly survive on the market with such severe and unrealistic fuel prices,” said Mazeze.
Ministry of Finance spokesperson Nations Msowoya said government is aware of the issue and discussing with Malawi Energy Regulatory Authority (Mera) on the way forward.
When contacted, Minister of Energy and Mining Atupele Muluzi said his ministry is aware of the matter but said it is an issue to do with Mera.
Said Muluzi: ” I am aware of the issue and as a ministry, we have also engaged Mera on the same.”
According to the letter, aviation fuel price in Malawi is almost 100 percent higher compared to other countries in the region like Kenya and South Africa.
Currently, jet fuel price in Malawi is around $6.45 (K2, 515) per gallon. In South Africa it is below $3.26 per gallon. In Lusaka, Zambia, jet fuel sells at $4.53 while in Harare Zimbabwe, it is being sold at $4.28 per gallon. In Tanzania, the same fuel is at $3.40.
Kenyan Airways, Ethiopian Airlines and South African Airways are some of the major airlines that operate in Malawi’s main airports.
In an email response, Davies Lanjesi, managing director of Puma Energy, admitted the jet A1 fuel is expensive in Malawi and that his company is talking with the relevant authorities for a common understanding.
“I think there is a knowledge gap of the cost of bringing jet fuel into Malawi by all stakeholders. Our current level of business is much lower than in neighbouring countries and yet the cost of various operations in this niche industry is similar. It seems there is an urgent need for all stakeholders to fully understand the differences in the pricing regime between Malawi and other countries,” he said.
According to Lanjesi, key differences include sources of the jet fuel, mode of transport, location from the ports and more importantly the industry volumes in the countries.
In a separate interview, Mera’s chief executive officer Ellias Hausi said fuel price in Malawi is more expensive than other countries due to, among other things, transportation costs from the ports.
He said other countries such as Mozambique, Tanzania and South Africa have got
port facilities that help to reduce the transport element in the price build-up.
Zambia, he said, although landlocked, has a refinery, which enables it to buy cheaper crude oil and refine locally.
He said currently Mera is discussing with Puma on the cost structure of the aviation fuel.
Economic commentator Henry Kachaje said there is not enough market for the product in Malawi.
“It is not a question of higher aviation fuel in the country but rather small industry volume which is reflected in higher landed cost than in the neighbouring countries,” he said.
