The fuel allocation battle between National Oil Company of Malawi(Nocma) and Petroleum Importers Limited (PIL) is turning ugly and threatens fuel availability in the country as fuel tanker operators and drivers have joined the fray in favor of PIL.
This is happening at a time PIL is about to lose 40 percent of its fuel importation quota.
The drivers and transporters have since threatened to stage a strike within 14 days, but Nocma Deputy Chief Executive Officer Hellen Buluma has described the proposition as unrealistic.
She, However, acknowledged that the drivers’ move would lead to disruption in the fuel supply chain.
Local fuel tankers operators have written a petition challenging the recommendation by the parliamentary committee on Natural Resources and Climate Change that fuel allocations be adjusted by increasing Nocma’s allocation to 90 percent and reducing PIL’s quota to 10%.
Currently, Nocma and PIL implement a 50:50 importation quota.
But, in a petition from Local Fuel Transporters dated December 7, 2020, the fuel haulers describe the reduction in the allocation of fuel transported by PIL as a direct attack to local business.
”This is a sharp contrast[sic] with the current government’s philosophy and policy of creating jobs for Malawians. We suspect that some unscrupulous persons including members of parliament are deliberately trying to frustrate governments efforts or are indeed trying to illegally benefit from such transactions,” the operators’ statement reads.
The letter-addressed to the Ministry of Energy, PIL, Nocma and Malawi Energy Regulatory Authority (Mera)- also questions the role of Mera guidelines fro importation of fuel in Malawi.
”We are surprised that the committee further recommended the usage of Delivered Duty Unpaid (DDU) which gives the supplier the right to choose which transporters will ferry fuels as opposed to the current one, which gives the client the right to make such choices,” the statement reads.
The group says the DDU system is highly disadvantageous to local transporters as foreign suppliers would prefer own transporters to local transporters.
It further demands that the government responds to their concerns within 14 days- warning that the failure to do so ”will leave us with no option but to stage a sit-in and suspend our services countrywide”.
Meanwhile, the professional Driver Union and the Truck Association yesterday announce dates for demonstration in borders and cities to protest what they call continued failure by authorities to resolve issues in the petition which concerned fuel transporters submitted last month.
In the statements, the associations announce that protests would be held in Lilongwe, Karonga, Mzuzu, Blantyre, Mwanza and Dedza on December 16, 2020.
”All fuel tankers will not be allowed to move on Malawians roads until all concerns raised by local fuel transporters are addressed,” reads a notice to district commissioners and police dated December 7,2020.
Responding to concerns by fuel tankers operators, Energy Minister Newton Kambala said the ministry had not yet taken any stand on the ”recommendations”.
”These are just recommendations; actually they are just discussions in the public domain. No action has been taken and will be taken until we receive documentation on them,” Kambala said.
In a written response, Nocma confirmed receipt of the petitions and on the issue of recommendations, said they were made after the parliamentary committee engaged stakeholders including PIL, Fuel Transporters Association, and the Ministry of Energy.
Buluma said all the matters raised in the petitions could only be resolved in the medium to long term
”An abrupt stop on the use of DDU will undermine Nocma fuel procurement financing model and lead to fuel shortage as early as January 2020,” Buluma said.
Buluma also described as untrue reports that the parastatals prefers foreign transporters over local ones.
”To the contrary, Nocma currently gives 100 percent fuel haulage business to Malawian transporters on the Beira Port route, which brings in 60 percent of fuel for Nocma on both systems of procurement and transportation,” Buluma said.
On proposals to have Nocma’s allocation increased to 90 percent , Buluma said, already, the company owned 78 percent of fuel storage facilities in the country.
The Liquid Fuel and Gas Act states that the importation quota is supposed to be based on storage capacity.
”Despite the 50:50 arrangement for importation quota currently in place, since the beginning of 2020, PIL has only been able to contribute an average of 38 percent against Nocma’s 54 percent in fuel importation.
”Nocma has fuel storage capacity of just above 60 million litres and is currently working to double this capacity to 120 million by 2023 and a project already underway will push Nocma’s storage capacity to 80 million litres by December 2021,” Buluma said.
Source: The Daily Times_December 8, 2020_By Eric Msikiti