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Malawi fuel shortage reaches crisis levels

Malawi fuel shortage reaches crisis levels
Fuel scarcity due to shortage of foreign exchange, fuel importers say

By Moses Michael-Phiri

LILONGWE, Malawi (AA) – Fuel scarcity in Malawi has paralyzed daily life, forcing public taxis and motorists to buy petroleum products such as diesel and petrol on the black market.

The fuel shortage since July this year has led to rising cost of living and mounting calls for protests in the streets in the southeastern African nation.

Martin Msimuko, general manager of Petroleum Importers Limited (PIL), told Anadolu Agency over phone that Malawi’s fuel imports have been affected by shortage of foreign exchange.

“We are only importing 85% of our capacity because there is foreign exchange scarcity,” he said. “Commercial banks do not have enough US dollars for all our requirements.”

Msimuko said the company is struggling to source $22 million which is required to import fuel per month.

John Kapito, executive director of Consumer Association of Malawi, told Anadolu Agency that the continuous fuel scarcity will in the long term be a burden on consumers.

“Soon we will have to pay more for goods and services whose prices are likely to keep escalating owing to the scarcity of the commodity,” he said.

Every morning for the past two months, there have been long queues of motorists at fuel filling stations across the country as many service stations do not have petrol or diesel.

Motorists have complained that they are spending long hours at filling stations instead of conducting their businesses.

Others opt for the parallel market which cost double the state price of about $1.60 per liter of petrol.

“I have a family to support, so what else can I do when someone on the black market has fuel? I buy from them and pass on the cost to passengers,” said Paul Kachingwe, a taxi operator in Malawi’s capital, Lilongwe.

Kisu Simwaka, director of financial markets at Reserve Bank of Malawi, recently told The Daily Times, a local newspaper, that the foreign exchange the country generates is only enough to cover 33% or one third of the import needs.

Each month, Malawi spends an average of $250 million for imports, including fuel.

The country is heavily dependent on foreign currency injections from the donor community such as the International Monetary Fund, whose Extended Credit Program is currently off track.

Malawi, a nation of about 18.5 million people, also depends on tobacco as its main foreign exchange earner. Last year, the country generated about $197.1 million in revenue from the crop, an amount which is not even enough to cover a month’s import fuel bill.

source: News Feed
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