Badea Approves K50b for fuel importation
By Antony Isaiah Jr
The crisis of fuel is expected to be curbed in the country as the board of Arab Bank for Economic Development in Africa (Badea) has approved the K50billion fuel financing facility for the National Oil Company of Malawi (Nocma).
The country has been experiencing shortage of fuel despite the government announced the slashing of Petrol Price a Development that has been attributed to lack of forex in the country.
Finance Minister Sosten Gwengwe confirmed the development saying the facility will help the Nocma to curb the issue of fuel shortages in Malawi.
“This is the facility that President Lazarus Chakwera referred to before he left for New York and the Badea board approved the facility to Nocma so that it can access it.
“Local Banks are experiencing foreign exchange shortages, so the line of credit will assist them,” said Gwengwe.
On her part, the National Oil Company deputy cheif executive officer, Helen Buluma concurred with Gwenge saying that facility is a major boost to ensure that the Oil is supplied in Malawi in an abundance.
She added that National Oil Company use the first tranche of K50 billion for the immediate procurement of petroleum products to replenish strategic fuel reserves stocks once all relevant paperwork is finalised.
“I can confirm.that this fuel financing facility agreement is between Nocma and Badea, with the Government of Malawi as a guarantor through the ministry of finance.
“Once all the relevant paperwork is finalised, Nocma will use immediate procurement of fuel products towards replenishment of the strategic fuel reserves stocks.
According to Buluma, the new facility will allow Nocma to channel some of the financing sourced from local banks towards addressing the problem of fuel shortage in the country.
She explained that about $28 million will go directly towards daily fuel requirements, as the company works on addressing the problem of fuel supply shortage being experienced in the country.
Buluma said operations towards normalising fuel supplies are underway.
“High volumes of petroleum products are entering the country on a daily basis, which has seen reduced queues at filling stations across the country,” she said.
On Saturday, privately-run Petroleum Importers Limited (PIL) said the country needs $80 million (K82.48 billion) to normalise fuel supply.
PIL General Manager Martin Msimuko told a joint Parliamentary Committee on Trade, Transport and Natural Resources that shortage of forex and the recent devaluation of the local currency are among factors affecting fuel supply.
