Breaking Down the Oil Debacle


BULUMA: Bone of contention

In simple English, if oil is imported at a higher cost the attendant result is failure to maintain competitive pump prices to protect consumers. There is a direct correlation between oil prices and cost of goods/services. Life would be hard if oil prices are poorly negotiated.

Our ask is simply for NOCMA to publish cost of oil in the intention to award contract notice as per the spirit of law to enable bidders that failed to make it & citizens transparently see to inform their next steps i.e acceptance or challenge.

Our crime is to ask for the price & attacks in several formats are coming in quick succession. We have not accused anyone of receiving bribes but called the hiding of the price as suspicious & stinky for a public procurement like this one.

* Why is MERA & NOCMA fighting?

NOCMA wants MERA [the regulator] to approve premiums without knowing what the final negotiated premiums would be.

MERA is arguing that it is difficult to give a blanket approval without the figures for the final negotiated premiums against each supplier but NOCMA says that is interference.

*On 19th May 2021, MERA Board requested for a meeting with NOCMA Board. NOCMA responded that their Board was of the opinion that should there be any meeting between the two Boards then it should be after the meeting with the Parliamentary Committee on Natural Resources and Climate Change.

On 24th May 2021, MERA requested to meet NOCMA Board but did not get a response to this very minute. Guess MERA can hang!

* Who has approved the oil deals [ tender process] to go ahead? NOCMA short circuited the system and acted clever, ignoring the regulator’s advise and used another channel [Parliament] to get the tender process approved.

NOCMA argues that PPDA is the right Authority to approve the tender process and not MERA. MERA has not disputed that fact but suspects that just as the regulator was not given all the information to base its decision on, PPDA could have been hoodwinked as well.

*MERA sets the maximum selling prices of fuel products and requires premiums that are competitive as provided in the Energy Laws. Importers who insist on premiums which are not competitive will cause pump prices to go up to unsustainable levels, this is MERA’s headache.

MERA does not use the Price Stabilisation Fund [PSF] to compensate what can be seen as “reckless malpractices” and MERA vehemently reminds NOCMA of previously disallowed claims from the PSF.

*The intervention by NOCMA through the Parliamentary Committee is seen as a violation of both the Energy Regulation Act and the Liquid Fuels and Gas Act. MERA’s regulator decisions are final and subject only to appeal to the High Court.

* What are the political lenses to oil? MERA [seen to be UTM] and NOCMA [seen to be MCP] * Who will suffer and pay? Poor Malawians Godot, we waited for long.

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