A stand-off between National Oil Company of Malawi (Nocma) and Mera over procurement threatens fuel availability in the country following the expiry of importation contracts.
Meanwhile, the situation has left the country’s strategic fuel reserves, which normally store 78 million litres of fuel, with only two months of fuel cover.
This was revealed at a meeting organised by the Parliamentary Committee on Natural Resources and Environment which brought together Nocma and Malawi Energy Regulatory Authority (Mera) officials in Lilongwe on Saturday.
Nocma officials, led by acting chief executive officer Hellen Buluma, told the meeting that should the situation remain the same, the country will likely face a fuel crisis from as early as June 30 following the expiry of contracts of current suppliers.
The Nocma officials accused Mera of deliberately stalling approvals of new permits for imports because of political interference as some government officials allegedly want to impose their preferred suppliers on Nocma, in addition to some disagreements over technical aspects of the procurement system.
They also accused Mera of lying to the public that the system used by the company to procure fuel from suppliers was both illegal and expensive.
But Mera officials, led by board chairperson Leonnard Chikadya, said their intervention is backed by law and was only restricted to advising Nocma to add two more companies to the list of suppliers to ensure that there is enough supply of fuel. They also said the two recommended suppliers were those who had participated in the bidding process.
However, this prompted emotional responses with Buluma accusinggovernment of imposing its preferred bidders through both Mera and politicians.
She told the meeting that Nocma and Mera officials were invited to a meeting at Capital Hill in Lilongwe where two Cabinet ministers and a presidential aide asked Nocma to give contracts to two of their preferred companies.
Said Buluma: “Let us follow the law to the letter. Even if this meant the end of me at Nocma, let us be fair. They are saying the matter is about DDU [Delivered Duty Unpaid], but we know why this issue is an issue today. We need to get to the bottom of things to say who is telling us the truth.
“There are lots of things that are happening behind the scenes. Let’s try to do the right things in Malawi. People were looking for change but this is the toughest political process we have had at Nocma.”
Mera acting CEO Ishmael Chioko, who attended the meeting at CapitalHill, dismissed Buluma’s version of the events, saying that no company was imposed on Nocma.
He said: “The meeting that took place at the Ministry of Finance was about a proposal from some oil company which said if they were granted licence to import fuel, they would guarantee the same fuel price for a year.
“Both Nocma and Mera refused. I personally said there is no company that can guarantee a fuel price for a year and that this can only be done by a fuel producing country.”
Parliamentary Committee on Natural Resources and Environment chairperson Welani Chilenga, whose committee ordered Mera board to end the impasse within a week and report back to the committee this Friday, said the committee is worried by the impasse.
He said: “What is happening is that all the supply contracts to Nocma are expiring and Nocma is struggling to get approvals for new contracts.