Govt-to-Govt fuel procurement strategy gains traction as Chakwera engages UAE for long-term solutions

In a decisive move to secure Malawi’s energy future, President Lazarus Chakwera is currently in the United Arab Emirates (UAE) negotiating a long-lasting fuel procurement deal under the government-to-government (G2G) framework. This groundbreaking initiative is part of the administration’s broader strategy to address fuel shortages, cut costs, and stabilize the supply chain by eliminating intermediaries and leveraging direct partnerships with oil-producing nations.

The strategy gained legislative backing on Tuesday when Parliament passed the Liquid Fuels and Gas (Production and Supply) Act (Amendment) Bill. This amendment facilitates the transition from the traditional open tender system to government-to-government agreements, empowering the Minister of Energy to nominate agents or state entities for fuel importation. Importantly, these arrangements will now operate outside the oversight of the Public Procurement and Disposal of Assets (PPDA) Act, a shift aimed at streamlining operations and fast-tracking supply.

Aiming for Sustainable Solutions
President Chakwera’s directive to adopt a government-to-government procurement model underscores his administration’s commitment to securing affordable and consistent fuel supplies for Malawians. By directly interfacing with state-controlled oil companies and refineries in countries like Saudi Arabia, Oman, and Bahrain, the government expects to negotiate more favorable terms, including extended credit facilities and competitive pricing.

Energy Minister Ibrahim Matola has emphasized that the bulk-buying system will significantly reduce costs by cutting out middlemen, a move that is expected to pass savings directly to consumers. This model has already been initiated under a partnership with the Kenyan government, allowing Malawi to source fuel directly from reputable suppliers such as Saudi Aramco, Abu Dhabi National Oil Company, and Emirates National Oil. These partnerships are laying the groundwork for Malawi to establish its own robust supply framework in the near future.

Legislative Support Amid Reservations
Despite opposition concerns about potential misuse of ministerial powers, the Chakwera administration has defended the amendment as a necessary step to protect the nation from perennial fuel stockouts. Minister Matola assured stakeholders that oversight mechanisms remain intact, with Petroleum Importers Limited (PIL) retaining a mandated 40% share of the country’s fuel imports to ensure transparency and competition.

Critics like Democratic Progressive Party (DPP) spokesperson Bright Msaka and United Democratic Front (UDF) legislator Esther Jolobala raised questions about forex availability and potential risks of bypassing PPDA regulations. However, government representatives countered that G2G deals offer flexible payment arrangements and better terms than those achievable under the open tender system.

A Future of Stability and Growth
Malawi’s new fuel procurement strategy is not just about meeting current needs—it is about building resilience and fostering economic growth. With the President actively negotiating long-term deals in the UAE, the country is poised to benefit from sustainable supply chains that will support industrial growth and improve the quality of life for ordinary Malawians.

As this transformative strategy unfolds, it marks a new chapter in Malawi’s quest for energy security. The Chakwera administration’s bold approach could redefine the nation’s fuel landscape, paving the way for stability and prosperity.

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