The Malawi Government has said the country is saving over $10 million USD (MWK 4bn) by using the automatic fuel pricing mechanism. This according to officials has also enabled the Road Fund Administration to accumulate more funds in fuel levy.
The revelations have come at a time when the country is setting fuel prices in line with international markets through the automatic fuel pricing mechanism.
Speaking in a recent interview, Reserve Bank governor Charles Chuka said the system has set fuel value relatively higher hence barring foreigners who were taking advantage of market gaps in the SADC region to illegally import cheap fuel from Malawi.
Chuka observed that the fuel consumption rate in dollar terms has decreased since the adoption of the system from 33 million Dollars to around 25 million Dollars.
“We are saving close to 5 billion kwacha every month through automatic fuel pricing system, as the outsiders have stopped buying it here due to its relatively higher value, and in fact we are now buying it from other countries now.” Chuka said.
John Bande, the Minister of Energy, is on record saying that the country will sustain the fuel availability throughout the lean period. “Currently we have 11 days cover of fuel and this is a very comfortable position. The lean period does not concern the fuel situation and we have all the assurance that the situation will remain positive.” Bande was quoted as saying.
In a related development, the consistent fuel imports have resulted in the rise in revenue from fuel levies that the Road Fund Administration collects. A published statement of financial position for Road Fund Administration, co-signed by George Partridge and Matthews Chikunkhuzeni for Chairman and Director respectively states that, the fund has revealed a 23% increase of income to MWK 9.3 billion from last year’s MWK 7.6 billion.
According to road fund administration, the growth is attributable to a MWK 1.2 billion increase in fuel levy collections in 2012 to 2013 fiscal year.
Malawi suffered serious fuel shortages in 2012 towards the end of former president Bingu wa Mutharika’s DPP led era.