Malawi has a total of two hundred (200) service stations mostly located in major towns and cities operated by Oil Marketing Companies such as PUMA, Total, Engen, Petroda, Mount MERU and Simso Oil while most rural remote or off-the-major roads areas of Malawi still do not have these essential infrastructure established.
The absence in rural areas has largely been attributed to the huge investment cost which the limited demand for fuel in the areas is unlikely to meet.
And according to one Happy Mhango of Youth and Society, high construction costs have made it more impossible for local Malawians to compete with foreign companies in the industry.
"It is very expensive for a Malawian to construct a service station unless deliberate measures are put in place to favour the local investors," he says.
The standards, however, offer developers an opportunity to construct service stations in rural areas at a lower cost. Whereas fuel tanks for service stations in urban areas have to be buried underground, the standards allow for installation of movable tanks in rural areas which reduces the construction costs
National Oil Company of Malawi (Nocma) Depot Manager for Mzuzu Derrick Lipenga stated that the move by MERA is a great encouragement to players in the sector because more locals will now be able to take part in the business.
“Government is encouraging more people to venture into the oil business and to see MERA put deliberate measures to ensure that more service providers go to rural areas, we see it as a positive move.
“For example, the estimated cost of basic rural service stations based on MERA’s simplified standards is about MK80 million and cost of mobile (movable) units range from MK5.7 million to Mk71 million while that of the basic standard service station is estimated at MK200 million, which is much reasonable” he explains.
Lipenga further appeals to various traders that have been illegally offering these services to rural communities to grab the opportunity before big companies seize the chance.
MERA Chief Executive Officer Collins Magalasi is optimistic that with the simplified standards, illegal selling and storing of fuels will reduce drastically.
“As much as we are not going to relax in fishing out illegal dealers, we are optimistic that more people will grab the opportunity of setting up service stations in rural areas at the marginable cost.
“I must, however, emphasize that before anyone can set up the service stations, they need to meet all the guidelines by MERA which include an environmental assessment, recommended measurements of the fuel tank and also a recommendation of 5Kms away from main roads,” advises Magalasi.
Among other recommendations, the simplified standards demand that a rural service station has to be located in an un-serviced area outside a minimum radius of 5 km off the main road from an existing and operating service station with volume of less than 40,000 litres per month with portable above ground service station models for rural areas.
The standards also provide that if volume increases, the service station will have to be upgraded to a standard service station (in tandem with urban/semi-urban requirements).