Why Malawi continues facing persistent fuel crisis – Economist Dr Ben Dzolowere gives solutions

Malawi Exclusive

Malawi’s fuel crisis is no longer a seasonal shock. It has become a persistent structural economic crisis. For three consecutive weeks, diesel has been available at only 30 percent of filling stations, with remote stations at zero availability, while motorists in Lilongwe and Blantyre are spending nights in queues.

The question many Malawians are asking is simple: Why does a landlocked country that privatized its fuel importation still fail to keep pumps wet?

Renowned economist Dr Ben Dzolowere has broken down the crisis into five interlinked reasons and offered four tough, practical solutions government must take now.

Why the crisis persists

1. The forex gap

Dr Dzolowere says fuel importation is 100% dollar-denominated and Malawi is simply not generating enough.

“Malawi consumes about 2 million litres per day, translating to roughly US$49 million per month. This was confirmed by NOCMA CEO Emmanuel Mataka before Parliament. Our export earnings from tobacco, tea, sugar and soybeans cannot cover fuel, fertilizer and medicine. When dollars are scarce, RBM rations forex, and fuel suffers,” said Dr Dzolowere.

2. Collapse of letters of credit and supplier trust

Dr Dzolowere reveals that international confirming banks suspended letters of credit for Malawian fuel imports in 2025-2026.

“Without LC confirmation, suppliers refuse to load fuel. NOCMA at times relied on open credit but failed to pay on time, creating arrears. Once trust collapses, even if RBM finds dollars today, suppliers demand cash upfront – which Malawi does not have. That is the reality,” he explained.

3. Depleted strategic fuel reserves

The economist says Malawi’s 60 million litres strategic reserves are dry.

“Instead of reserves feeding the market, incoming tankers from Dar es Salaam, Tanga and Beira are being sent directly to filling stations. This is crisis management, not supply management. There is no buffer when one shipment delays,” said Dr Dzolowere.

4. Lapsed IMF programme

According to Dr Dzolowere, the lapse of Malawi’s US$175 million Extended Credit Facility in May 2025 after only US$35 million was disbursed was a fatal blow.

“An IMF programme acts as a seal of approval that makes foreign banks comfortable to confirm LCs. Without it, Malawi is seen as high-risk. Until a new Staff-Level Agreement is signed, forex inflows remain constrained and fuel supply will remain erratic,” he said.

5. Global shocks and local cartels

Dr Dzolowere also blames the Iran-Israel war in early 2026 which disrupted global diesel supply, plus local hoarding.

“Fuel meant for pumps is diverted to jerry cans and sold at K15,000 to K20, 000 per litre against the official MERA price of K5,863 for diesel. MERA has admitted enforcement alone cannot fix a forex problem,” he added.

How the crisis could be resolved – Dr Dzolowere’s 4-point plan

Solution 1: Restore credibility to unlock LCs

“Government must urgently conclude a new IMF programme. A new ECF would trigger donor budget support and restore confidence of international banks. RBM must also prioritize fuel 100% on the forex priority list and clear NOCMA arrears transparently,” advises Dr Dzolowere.

Solution 2: Diversify forex generation – Fast

“Malawi cannot continue relying on Tobacco alone to generate forex . Government must fast-track Kayerekera uranium mine, accelerate formalization of gold exports through RBM, and aggressively support AGCOM to export value-added soy, groundnuts and pigeon peas,” he says.

Solution 3: Rebuild strategic reserves with blended financing

“NOCMA should not rely on Treasury alone. It should negotiate a revolving fuel import facility with PTA Bank (TDB) and Afreximbank, backed by a fuel levy escrow account. This would ensure reserves are always at 80% capacity, not zero,” Dr Dzolowere suggests.

Solution 4: Ruthless enforcement and digital tracking

“MERA and NOCMA must roll out real-time fuel tracking from border to pump. Every tanker must be GPS-tracked. Licenses of stations caught hoarding must be revoked for 12 months. Black market kingpins must be prosecuted,” he concludes.

Conclusion

Dr Dzolowere warns: “This fuel crisis is a symptom of a deeper economic disease: Malawi is consuming in dollars what it produces in Kwacha. Without a credible IMF programme and a radial shift to export-led growth, Malawi should prepare for fuel shortages to persist into January 2027.”