Petroleum Importers Limited (PIL), a consortium of fuel importing firms, has moved in to ensure security of fuel supply beginning July 1 2016 by opening bids of 11 international fuel supply companies that tendered to supply the product.
This follows invitation of bids in March this year for the companies to supply 282 million litres of refined petroleum in form of petrol, diesel and paraffin from July 1 2016 to June 30 2017.
This, however, comes against the background of government mulling over who should play the role of importing fuel in the country between PIL and government-owned National Oil Company of Malawi (Nocma)
Figures from Malawi Energy Regulatory Authority (Mera) show that Malawi uses about 23 million litres of fuel per month compared to 180 million litres and 133 million litres in Zimbabwe and Zambia respectively.
PIL general manager Enwell Kadango, in an interview on Wednesday in Blantyre, said for the next two weeks, the fuel supply companies will be evaluated in terms of pricing, financial capability and infrastructure responsiveness.
“We want to ensure security of supply of fuel in the country. We want a streamlined and smooth process and we know what we are supposed to do. We have been doing this for the past 16 years,” he said, adding that opening of the bids was done in full view of all suppliers to ensure transparency of the process.
Specifically, he said the evaluators will look at pricing—which is a critical variable—and demonstration of capability in terms of storage facilities at the ports of Beira and Nacala in Mozambique and Dar es Salaam in Tanzania, or any arrangement thereof.
“We want companies that have storage facilities and or have storage arrangements at ports and are able to bring the product [fuel] within the specified time,” said Kadango.
Commenting on the availability of fuel, he said the country normally has about 20 days fuel cover and almost 30 days to 40 days at port with another three months to six months in approved fuel financial facilities.
In recent times, government has been engaged in discussion regarding who should play the role of importing fuel for the country between PIL and Nocma.
Government wants to introduce Bulk Procurement System (BPS) to ensure that buying of fuel is undertaken by a government agency or an independent petroleum importation coordinator jointly owned by oil marketing companies and government, in so doing eliminating PIL.
Principal Secretary in the Ministry of Natural Resources, Energy and Mining Kester Kaphaizi could not be reached for a comment yesterday on the state of the negotiations regarding BPS.
But he earlier said government would not want importation of fuel to be disrupted.
Analysts say whether BPS as envisaged by government is the best way to go remains to be seen since PIL is already bringing fuel in bulk, and is experienced in the business. n