Government has conceded that major consumers of fuel should be given independent importation licenses for fuel in order to reduce scarcity on the common market Malawi News has established.
This comes hot on the heels of a fuel pump price adjustment averaging 34 percent (for diesel and petrol) as announced on Tuesday by the Malawi Energy Regulatory Authority (Mera).
Minister of Natural Resources Energy and Environment Goodall Gondwe told this paper that government is willing to give companies like Central East Africa Railways (Cear) which uses over 70,000 litres of diesel every week a chance to import fuel for their operations to improve availability of the product in the country.
But economic analysts have advised government to tread carefully when trying to implement the decision.
Malawi Economic Justice Network (Mejn) Executive Director Dalitso Kubalasa told Malawi News that, "government has to calculate this move weighing thoroughly its pros and cons so that Malawians are not given a raw deal in the end. Otherwise anything else that can bolster fuel supply against the overwhelming demand would actually be more than welcome," said Kubalasa.
Cear Director of Marketing and Commercial Services Wilfred Ali told Malawi News the fuel scarcity has paralysed the operations of the company forcing it to operate only three trains the past two weeks.
"The fuel that we use every week can run almost 1,000 cars. As such it is imperative that we are engage in a process of applying for a direct fuel importation license so that we can relieve the pressure on the fuel that is imported," said Ali.
He said that the problem has affected both cargo and passenger services and forced the company to incur heavy revenue losses.
"We run a cargo service from Blantyre to Mozambique through Liwonde and Nayuchi while our local passenger routes normally carry 40,000 passengers every week on the Blantyre-Kanengo, Blantyre-Makhanga and Balaka-Nayuchi routes, which is our social responsibility," he added.
Ali also said the firm's failure to operate normally has had adverse effects on other sectors of the economy including agriculture.
"As we are speaking now about 20,000 bales of tobacco are still lying in our stations waiting to be shipped to the Auction Floors," he said.
Tobacco Control Commission Public Relations Officer Juliana Chidumu confirmed that the tobacco market is to close anytime soon.
"Actually we planned to close Limbe market this week but as for the other markets, dates have not been set yet," said Chidumu.
Kubalasa said the development may have negative repercussions on the country's economy.
"It is obvious that farmers whose tobacco has not been sold until now have their future looking bleaker," said Kubalasa. "This drastically affects their decision on what to grow in the coming season. Most of them are already in a desperate position as they have not recovered the costs of production for last season."
Ironically, Cear has been transporting fuel from the Mozambican port of Nacala through Nayuchi and Liwonde for other fuel companies.
"Our locomotives do not cross the border. It's only the wagons which are pulled to the port by Mozambican locomotives so you can see that there is no chance of refueling while in Mozambique," said Ali.
Malawi is facing a third and prolonged fuel crisis this year alone which has been blamed on scarcity of foreign currency, among others.