Malawi Energy Regulatory Authority (Mera) says it will next year increase the use of railway to import fuel, a move which is touted to reduce transport cost.
In a written response on Thursday, Mera consumer affairs and public relations manager Fitina Khonje said the regulator has already engaged players in the sector.
“Indeed all factors being equal, rail is a cheaper mode of transportation and increasing the volumes transported by rail can have a significant bearing on fuel prices,” she said.
Figures from Mera show that between July and August this year, Malawi imported 52.04 percent or 61.2 million litres of fuel by road via Beira Corridor in Mozambique, 47.8 percent or 57.3 million litres by road via Dar es Salaam Corridor in Tanzania and 1.11 percent or 1.3 million litres by rail from Nacala also in Mozambique.
The National Energy Policy stipulates that by 2022, 30 percent of fuel should be imported by road through the Dar es Salaam Corridor, 50 percent by road through Beira Corridor and 20 percent by rail through the Nacala Corridor subject to review by Mera.
A Data Collection Survey on Nacala Corridor Intergrated Development in Southern Africa Final Report by the Japan International Corporation Agency observes that at present, traffic volumes through the Nacala Corridor in Malawi are not much and the potential of the corridor development is not utilised effectively.
Nacala Logistics figures show that it costs an average of $0.06 (K49) to $0.08 (K66) per tonne per kilometre to transport goods by rail while freight or road transport costs $0.10 (K82) to $0.12 (K98) per tonne per kilometre.
For landlocked countries such as Malawi, development and utilisation of international corridors, which would improve access to international markets and vitalise the regional economy, are important issues for the development of the national economy.
Currently, Malawi pays 15 percent more on transport from the sea compared to other countries, according to a recent study by the Common Market for Eastern and Southern Africa.
For Malawi, the urgency to have the corridors operational is important as they connect to sea ports in Mozambique and Tanzania for smooth transportation of imports and exports.
Meanwhile, the cost of fuel has been on the rise, with Brent, the international benchmark, rising for a fifth straight day, adding 1.4 percent to $79.22 (about K65 000) a barrel, advancing about 50 percent this year and nine percent this month.
In an interview, energy expert Kandi Padambo observed that the rising fuel price is not conducive for imports dependent economies such as Malawi.
“Local pump prices are likely to be adversely affected and with that, prices of other essential commodities will also be impacted,” he said.
Source: The Nation_October 4, 2021_by Grace Phiri