Fuel shortages to continue in Malawi

Malawi will continue to face erratic fuel supply because the country’s international suppliers do not still have confidence in the economy, Finance Minister Ken Lipenga has said.

Speaking in an exclusive interview on Friday in the wake of the current erratic fuel supplies, Lipenga said: “The difficulties that we see manifesting themselves regarding fuel are to an extent a reflection of the difficulties we had in the past with regard to forex.

“But it [also] has to do with the issue of confidence from our international creditors at the moment, the way we are sourcing fuel is not really the way we used to.”

International fuel suppliers suspended their services in 2010 because Malawi failed to meet its payment obligations due to the forex shortage. This led to most fuel companies losing the ability to have their Letters of Credit accepted internationally.

Last week, Lilongwe experienced shortages of diesel and petrol, reminiscent of the late president Bingu wa Mutharika’s days when fuel shortages in 2010 and 2011 cost the economy an estimated K111 billion.

In Blantyre, the commercial capital, diesel has also been in short supply in the past week whereas some filling stations do not have petrol in stock.

In Mzuzu, there were also reports of erratic availability of diesel as evidenced by posts by some desperate motorists on the Malawi Fuel Watch group on Facebook.

But Lipenga was optimistic that the situation will soon stabilise as the country continues to implement economic reforms backed by the International Monetary Fund (IMF) and other donors.

Said the minister: “We did not expect the situation to improve overnight, but we are glad that as soon as we implemented measures like the devaluation [of the kwacha] and other related measures, there was a dramatic result that Malawians could see the fuel queues pretty much came to an end…because forex was available.

Reserve Bank of Malawi (RBM) Governor Charles Chuka said at the weekend the central bank is doing everything possible to make foreign exchange available for fuel.

“More and more forex is being made available for the importation of fuel because that is critical as you can see the construction industry that was stuck is back to normal because fuel is now available. If there are any shortages of fuel, that could be [due to] logistics,” he said.

Fuel pump prices went up two weeks ago due to the weakening kwacha against major currencies such as the dollar and the South African rand.