Business NewsFront Page

Fuel reserves boon for retailers—NOCMA

Construction of a fuel reserve in Matindi, Blantyre in progress
Construction of a fuel reserve in Matindi, Blantyre in progress

National Oil Company of Malawi (Nocma) says the fuel reserves being constructed will, besides ensuring security of supply of the commodity particularly in rural areas neglected by fuel importers, provide a business opportunity for retailers.

The 60-million litre storage reserves—to act as dry ports with a 60-day fuel cover—will also be an opportunity for retailers to open fuel service stations in a number of areas, reducing the distance that consumers travel to access the commodity, according to Nocma chief executive officer (CEO) Robert Mdeza.

There are a number of areas, just a few kilometres out of town, that do not have fuel service stations, compelling vendors to sell the commodity at higher prices than the recommended pump price.

“Businesspeople will invest in service stations to serve all people in the country. This will change the lives of people completely because it will not be business as usual,” he said in an interview on Friday.

Mdeza said ideally, this is a way of bringing ports closer home, citing Zambia, a landlocked country and Tanzania, where the concept is working well and has ensured security of fuel supply.

He argued this is the same concept used in the storage of maize at Strategic Grain Reserves (SGR) at Kanengo in Lilongwe, saying when fuel is put in the storage reserves, “we will only buy that [which] we will consume”.

“The idea is, let us have 60 days of fuel sitting in the country. Instead of thinking that the port is going to Mozambique, the ports are actually coming in the country,” said Mdeza, erstwhile chief executive officer of Petroleum Importers Limited (PIL), a grouping of private sector fuel importing firms.

The reserves, at Matindi in Blantyre and Kanengo in Lilongwe with a capacity of 25 million litres each; and Sonda in Mzuzu with 10 million litres, will ensure that the country’s fuel storage capacity increases to 60 days from the current 10 days.

The project worth $26 million (about K10 billion), financed through a loan from Export and Import Bank of India, is expected to be completed in January next year, according to deputy director for energy Joseph Kalowekamo.

“We can guarantee that once the project is completed, there will be fuel security in the country,” he said.

Besides the fuel reserves under construction, Malawi also has other reserves at Chipoka in Salima, Chilumba in Karonga and Mchinji with a combined capacity of close to two million litres.

Fuel is a critical economic variable and its shortage has dire economic consequences as was the case in 2011 and 2012 when its acute supply led to a near collapse of the economy.

Related Articles

Back to top button
WordPress › Error

There has been a critical error on this website.

Learn more about troubleshooting WordPress.