Malawi’s imports of petroleum products increased by approximately 12 percent in 2024, the latest Malawi Government Economic Report compiled by the Ministry of Finance has shown.
According to the report, the increase in demand for petroleum products was largely driven by increased economic activities that were registered in the economy.
“Furthermore, the importation of individual petroleum products such as petrol and diesel increased and decreased by 6 percent and 5 percent, respectively.
“On the other hand, importation and demand for paraffin decreased by 26 percent in 2024 as compared to last year’s imports,” the report says.
With the relatively prevailing low fuel prices in Malawi, analysts have argued that Malawi is indirectly importing fuel for neighbouring countries, which have been benefiting from the low prices.
Malawi has three main routes for importation of petrol, diesel and paraffin and these are Beira and Nacala in Mozambique and Dar es Salaam in Tanzania.
According to the report, the main route for importation in 2024 was Dar es Salaam through which approximately 61 percent of petroleum products were imported followed by Beira and Nacala at 30 percent and 9 percent, respectively.
It further says there were two major importers of fuel in 2024, namely National Oil Company of Malawi Limited (Nocma) and Petroleum Importers Limited (PIL).
“Nocma is a Government of Malawi-owned company while PIL is a limited company owned by private fuel importers. In 2024, Nocma and PIL imported approximately 64 percent and 31 percent of the fuel, respectively, while other importers contributed about 5 percent of fuel imports.
“This is an increase in importation by Nocma as compared to the previous year when they imported 59 percent, whilst there was a drop in importation by PIL from 40 percent to 31 percent and an increase by private importers from 1 percent to 5 percent,” the economic report reads.
In late November last year, President Lazarus Chakwera announced that Malawi was transitioning from the Open Tender System for procuring fuel to a Government-to-Government (G-to-G) arrangement as one way of ensuring continued supply of the commodity on the market.
According to Chakwera, a G-to-G arrangement would make Malawi’s access to fuel respectively more secure through better payment terms and cycles.
He observed that Malawi’s monthly fuel demand stands at $50 million, which is used by Nocma and PIL.
Chakwera admitted that the rate at which Malawi generated foreign exchange had not kept pace with the growing demand for fuel, making these two importers unable to raise enough forex from the market to import the required volumes of fuel.
Figures provided at the time showed that in the month of August, Nocma only raised $23 million of the required forex, while in September and October, that number fell below $20 million, increasing Nocma’s debt to suppliers to $72 million in October and resulting in a 10-day suspension in Nocma’s access to fuel imports.
Consumers Association of Malawi, through its executive director John Kapito, has been pushing the authorities to push up the price of fuel to ensure that the commodity is available on the market.
However, Chakwera has been against a fuel price hike.
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