Page 9 - AfrOil Week 13 2020

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MALAWI
THE National Oil Company of Malawi (NOCMA) is gearing up to expand its fuel stor- age network, according to a high-ranking com- pany representative.
Hellen Mbuluma, NOCMA’s deputy CEO, told the Parliamentary committee on Commis- sions,StatutoryCorporationsandEstateEnter- prises last week that the state-owned firm was capable of storing up to 60mn litres of petroleum products. NOCMA needs additional capacity to ensure that it can cover domestic demand in the long run, so it has drawn up an expansion pro- gramme that calls for raising the ceiling by 50%, she said.
“Currently, we have 60mn litres of fuel reserves for both diesel and petrol in all the three reserves situated in all the regions [that] are always operational,” she was quoted as say- ing by the Nyasa Times. “But due to increase in demand, [this] will cost us about MWK3.5bn [$4.8mn]. The project will be revenue-based but will consult commercial banks in terms of infrastructure.”
Eventually, she added, NAMCO hopes to push the fuel storage network’s capacity up to 90mn litres. This is in line with the requirements of the Southern Africa Development Com- munity (SADC), an organisation that counts Malawi among its members, she noted.
Mbuluma did not say when the company might begin work on the expansion programme. But she did state that NAMCO intended to add another 10mn litres of capacity at the Kanengo storage depot at Lilongwe.
She was speaking after leading members of the committee had gone on a tour of the Matindi fuel storage depot in Blantyre. Isaac Kaneka, the chairman of the committee, said after the tour that NOCMA had given a credible
demonstration of its readiness to meet domestic fuel demand.
“This tour has come barely days after meeting NOCMA officials in Parliament. We were not convinced enough and that is why we decided to come to see if they really meant what they said,andweareverymuchimpressed,”hewas quoted as saying by the Nyasa Times. “There is enough reserve for the critical commodity, and everythingseemstobeinplace.”
NOCMA typically stores about 18mn litres of diesel and 7mn litres of gasoline at the Mat- indi depot in Blantyre and similar volumes at the Kanengo facility in Lilongwe. Its third depot, which lies in Mzuzu, can hold 10mn litres of diesel and gasoline. According to the Malawi Energy Regulatory Authority (MERA), these storage sites hold enough fuel to cover the country’s consumption of gasoline for 43 days and diesel for 83 days. ™
 OPEC’s flagship member Saudi Arabia, which shouldered the largest portion of the 2.1mn barrel per day (bpd) production cuts under that agreement, has pledged to push the amount of crude it sells from about 10mn bpd to 12.3mn bpd. Meanwhile, Russia has said it wants to raise output from about 11.2mn bpd to 11.7-11.8mn bpd by the end of the year.
Russia’s decision to reject Saudi Arabia’s call for another 1.5mn bpd in production cuts was the primary reason for the collapse of the OPEC-plus agreement in early March. Its move set off a price war on world oil markets, which were already looking very bearish in light of the coronavirus (COVID-19) outbreak’s
dampening effect on energy demand in China and elsewhere.
Sylva said last week that he hoped Moscow and Riyadh would be able to reconcile and resume co-operation on efforts to keep oil prices steady. “It’s in our interests, collective interests, toensurethatweareabletostabilisethemarket,” he remarked.
Weak oil prices have the potential to inflict substantial damage on Nigeria’s economy. Oil revenues account for about two thirds of the Nigerian government’s revenue, and officials in Abuja drew up this year’s budget on the assump- tion that crude prices would average $57 per barrel this year. ™
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Malawi hopes to expand fuel storage capacity by 50%
NOCMA can store 60mn litres of gasoline and diesel (Photo: Maravi Post)
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