State-owned National Oil Company of Malawi (Nocma) has been faulted for overstretching its mandate by offering loans and financing private businesses at the expense of taxpayers’ money, we have details.
Nocma was established in 2010 under the Companies Act of 1984 with a mandate to manage strategic fuel reserves and provide, at a fee, hospitality to new entrants to promote competition and upstream oil and gas exploration.
A letter we have seen, dated April 29 2022, signed by Nocma deputy chief executive officer Helen Buluma addressed to chairperson of Women in Logistics and Large Scale Supplies (Wolls), informs the group that it has been nominated to transport fuel from Tanzania to Malawi on interim basis this month.
Reads the letter in part: “Kindly take note that as part of our support towards efficient fuel haulage operations, Nocma will offer your association a credit facility for the purchase of diesel for the sole purpose of transporting Nocma’s petroleum products during interim haulage arrangement.”
The group is also expected to identify 100 trucks for loading of the petroleum products and share with Nocma the list for each proposed trip.
In the arrangement, the group will lift petroleum products for Camel Oil Limited, which was contracted by Nocma together with Lake Oil to supply and deliver 54 820 metric tonnes(MT) and 100 000 MT respectively.
The letter also notes that Camel Oil is offering Wolls lower rates than those prescribed by Malawi Energy Regulatory Authority (Mera) and Nocma has committed to top up the difference.
According to the letter, the supplier is offering $125/m3 from Dar es Salaam to Mzuzu and $135m3 from Dar es Salaam to Lilongwe.
But, in an interview, Mera spokesperson Fitina Khonje stressed that the regulator expects the licencees to use Mera established rates.
She did not elaborate what action Mera may take on those that don’t adhere to the prescribed rates.
“The road freight rates by Mera are K134.72 per litre from Dar es Salaam to Mzuzu and K149.60 per litre from Dar es Salaam to Lilongwe,” said Khonje.
Nocma spokesperson Chisomo Mwamadi justified the move saying the organisation is working with three other associations apart from Wolls as part of its drive to ensure Malawian participation in the fuel haulage business.
On topping up of the transport rate, Mwamadi said fuel haulage rates for Malawian transporters are regulated by Mera and for Nocma to comply with the regulated fuel haulage transport rates and ensure that it lands the products in a cost-efficient manner, the company will cover the difference between the regulated rate for Malawian transporters and the rates prevailing in the two port countries.
He said Nocma has various sources of funds which range from fuel importation, transportation and distribution adding that the arrangement in place does not disadvantage the taxpayer.
Yesterday, Wolls, which comprises 45 women, held a press briefing in Lilongwe and indicated they already conducted a successful test of hauling fuel from Lilongwe depot to Blantyre.
Wolls secretary Margret Chaika told journalists that some of their tankers have already left for Tanzania and others will be leaving soon.
Economist Milward Tobias, who is also Centre for Research and Consultancy executive director, wondered in an interview as to whose interest Nocma is serving.
He pointed out that Nocma is clearly deviating from its mandate by financing operations of a private entity, adding that Nocma board owes the nation an explanation on this development.
Said Tobias: “It is not clear what Nocma is doing, and which forces are behind such action and what legal framework it is based on. What is the justification of using taxpayers’ money in such a way? Nocma board has to tell Malawians what is going on at Nocma.”
When contacted for comment, Nocma board chairperson Zanga-Zanga Chikhosi did not respond to our questionnaire.
Another expert in the fuel industry, who refused to be named, observed that the country has capable Malawian transporters who have tankers and could have accepted the lower rate and do business, but wondered why Nocma is topping up on behalf of the association.
He said: “Where is Nocma getting this money to be splashing like this. On the business front, it doesn’t make sense, but on women empowerment it does. Again, does it mean these women couldn’t have gone to banks to get loans? Why is Nocma acting like a Father Christmas?”
Smart Kalua, a member of Fuel Transporters in Malawi, in an interview on Thursday, decried the move by Nocma, saying the grouping has over 700 trucks that are not being used and yet instead Nocma engages a new association without financial capacity.
Said Kalua: “We have the capacity to do this job without being financed by Nocma; instead, Nocma is opting for a group without capacity. This is not fair and we suspect something fishy to be going on.”
Parliamentary Committee on Natural Resources chairperson Welani Chilenga asked for more time before commenting on the matter.