Malawi Energy Regulatory Authority (Mera) says low return on investments for fuel products in rural areas is scaring away investors despite efforts to simplify entry standards for rural fuel stations.
Speaking on the sidelines of Mera public presentation on rural service stations in Blantyre on Friday, the regulator’s director of liquid fuels and gas Alinafe Mkavea said it is in the wake of this that Mera has come up with a rural service model to promote investments in the sector.
Among other recommendations, the simplified standards demand that a rural service station should be located in an unserviced area outside a minimum radius of five kilometres off the main road from an existing and operating service station with volume of less than 40 000 litres per month.
The standards also provide that if volumes increase, the service station will have to be upgraded to a standard service station in tandem with urban/semi-urban requirements.
Mkavea said construction of a full flegded mobile fuel station in this category can go as low as K30 million, which is less than 30 percent of the same in urban area.
She said: “We have reduced issues of plot size, tankage one needs to have on sight when coming up with a service station and we believe this will benefit the investors.”
One of the potential investors, Elias Kalonga of CC Fuel Centre in Bangwe, Blantyre, said potential investors are shunning rural areas because at the moment, there is no motivation e due to low business.
“They are talking about margin for rural filling station to have a margin not exceeding 40 000 litres and when you surpass that, they will upgrade you which is not fair because they have to keep you to make profits in the rural areas,” he said. n