President Lazarus Chawera’s new government-to authorities (G2G) association for importing gas to deal with the present gas scarcity within the nation has began bearing fruits, with the ministry of power asserting that Malawi will begin receiving 51.1 million litres of gas from Saudi Arabia subsequent week.

Minster of Energy Ibrahim Matola in an announcement on Friday introduced that the Government of Malawi has procured 51 million litres of petrol and diesel from the United Arab Emirates to ease the continued gas scarcity within the nation.

The assertion mentioned the 40,000 metric tons (about 51.1 million litres) of gas, procured underneath the Kenyan bilateral association with Lilongwe, with begin arriving into the nation on Thursday subsequent week.

” This emergency gas procurement goals to complement the traditional gas imports by NOCMA, Petroleum Importers Limited, and different licenced petroleum importers which have confronted challenges in accessing gas importing financing resulting in the present gas shortages,” mentioned Matola within the assertion.

Malawi’s annual gas import invoice stands at $600 million, whereas the nation generates $1 billion in foreign exchange yearly.
Last month, Malawi Parliament handed the Liquid Fuels and Gas (Production and Supply) Act (Amendment) Bill to facilitate the transition from open tender to government-to-government procurement of gas.

The new regulation is supposed to operationalise President Lazarus Chakwera’s directive to transition from the open tender system to a government-to-government procurement course of and provides the Minister of Energy the ability to appoint an agent or State entity to import gas with out the oversight prescribed within the Public Procurement and Disposal of Assets (PPDA) Act of 2017.

“Currently, Nocma uses so many suppliers, and so does Petroleum Importers Limited (PIL), but these suppliers import in smaller quantities each, which means they don’t enjoy quantity discounts. Malawi ends up paying more for fuel due to the lack of economies of scale and a fragmented supply chain” mentioned Matola not too long ago.

Under the brand new association, Nocma will now have the ability to procure gas in massive portions from main worldwide oil corporations such because the Abu Dhabi National Oil Company (Adnoc), Emirates National Oil Company (Enoc), and Saudi Aramco, amongst others.

By dealing straight with these oil giants, Malawi will possible safe higher pricing and extra favorable credit score phrases.
“With Nocma applying for foreign exchange, the correct demand will be reflected, which will result in a stabilization or even an appreciation of the local currency,” Matola says.

Additionally, the G2G framework will present extra flexibility in fee phrases, permitting Nocma to barter higher credit score services with oil producers.

“The G2G arrangement will provide more extended credit periods, which will help the country manage its cash flow and avoid the perennial fuel stock-outs that we have witnessed in the past,” Matola provides.

About 1,409 vans will probably be required to haul the 51.1 million litres of gas from Port of Tanga in Tanzania into the nation, says the assertion.