Malawi’s imports of petroleum products increased by approximately 12 percent in 2024, the most recent Malawi Government Economic Report compiled by the Ministry of Finance has proven.
According to the report, the rise in demand for petroleum merchandise was largely pushed by elevated financial actions that have been registered within the economic system.
“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 comparatively prevailing low gas costs in Malawi, analysts have argued that Malawi is not directly importing gas for neighbouring international locations, which have been benefiting from the low costs.
Malawi has three primary 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 principle route for importation in 2024 was Dar es Salaam by way of which roughly 61 p.c of petroleum merchandise have been imported adopted by Beira and Nacala at 30 p.c and 9 p.c, respectively.
It additional says there have been two main importers of gas in 2024, specifically 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 financial report reads.
In late November final 12 months, President Lazarus Chakwera introduced that Malawi was transitioning from the Open Tender System for procuring gas to a Government-to-Government (G-to-G) association as a technique of making certain continued provide of the commodity in the marketplace.
According to Chakwera, a G-to-G association would make Malawi’s entry to gas respectively safer by way of higher cost phrases and cycles.
He noticed that Malawi’s month-to-month gas demand stands at $50 million, which is utilized by Nocma and PIL.
Chakwera admitted that the speed at which Malawi generated overseas alternate had not stored tempo with the rising demand for gas, making these two importers unable to boost sufficient foreign exchange from the market to import the required volumes of gas.
Figures offered on the time confirmed that within the month of August, Nocma solely raised $23 million of the required foreign exchange, whereas in September and October, that quantity fell under $20 million, rising Nocma’s debt to suppliers to $72 million in October and leading to a 10-day suspension in Nocma’s entry to gas imports.
Consumers Association of Malawi, by way of its government director John Kapito, has been pushing the authorities to push up the value of gas to make sure that the commodity is offered in the marketplace.
However, Chakwera has been in opposition to a gas value hike.