A neutral economic reading of Malawi’s recurring fuel shortages shows that foreign-exchange scarcity is the common vulnerability, while the external shocks and policy settings have changed.

By Dennis Richard, Economist

Fuel queues have again become part of everyday life for many Malawians. Predictably, the debate has become political. One side treats the queues as proof of government failure. Another points to the international energy crisis and argues that Malawi is simply experiencing what other countries are experiencing.

Economics suggests that neither explanation, taken alone, is sufficient. Malawi is being hit by a genuine international energy shock, but the severity with which that shock reaches consumers depends heavily on domestic conditions: foreign-exchange availability, fuel-pricing policy, supplier credit, transport routes, strategic stocks and the country’s ability to finance imports when international prices rise.

The useful question, therefore, is not whether the present shortage is ‘global’ or ‘domestic’. It is how an external shock interacts with Malawi’s long-standing vulnerabilities.

Malawi’s structural exposure

Malawi imports virtually all of its petroleum products and must pay for them in foreign currency. The Ministry of Energy told The Nation in early October that the fuel industry competes with other importers for scarce foreign exchange. The same report put average consumption at about one million litres of petrol and one million litres of diesel per day – roughly 60 million litres a month and 720 million litres a year combined.

This matters because storage capacity is not the same thing as energy security. Tanks can be expanded, but they cannot be filled continuously if importers cannot obtain dollars, honour Letters of Credit or pay suppliers on time. For a landlocked country whose fuel moves through regional ports and corridors, financing and logistics are as important as physical storage.

What drove the shortages under Chakwera?

The Chakwera administration faced several external shocks. Russia’s invasion of Ukraine raised global fuel and fertiliser costs, while cyclones and weak agricultural performance reduced export earnings and increased pressure on the balance of payments. It would therefore be inaccurate to describe the shortages of that period as purely home-made.

But the evidence shows that the persistent constraint increasingly became domestic macroeconomic financing. World Bank analysis of 2022 found that foreign exchange had become widely unavailable and linked that shortage directly to long queues at filling stations and shortages of other imports. Official gross foreign-exchange reserves fell from US$605 million in August 2021 to US$326 million in October 2022, equivalent to about 1.3 months of import cover.

The problem later became more complicated because pump prices were not adjusted sufficiently to cover the full cost of importing fuel. The World Bank reported that insufficient foreign exchange, delayed price adjustments and logistical challenges contributed to repeated shortages. It also found that mounting arrears caused international suppliers to withdraw open-credit lines, while NOCMA’s arrears exceeded US$70 million. In its 2025 assessment, the IMF likewise described large fuel-import losses and arrears associated with below-cost pricing.

In economic terms, this created a circular problem: scarce forex limited imports; below-cost pricing weakened importers’ cash flow; arrears weakened supplier credit; and the resulting shortages created queues and parallel-market premiums. Global conditions mattered, but the binding vulnerability was Malawi’s inability to finance fuel imports reliably and sustainably.

What is different under Mutharika?

The present Mutharika administration inherited those structural constraints; they did not disappear with a change of government. In January 2026, MERA raised petrol and diesel prices by about 42 percent as the authorities restored more cost-reflective pricing. Reuters reported that the adjustment was intended to prevent shortages and preserve scarce foreign exchange after prices had not been adjusted sufficiently under the previous system.

That change addresses one part of the old problem – under-recovery – but it does not create foreign currency. The current shortage itself demonstrates this. In early October, the Ministry of Energy said some Letters of Credit had gone unhonoured because of foreign-exchange constraints, while MERA said financing gaps in fuel procurement become visible over time. Fuel retailers reported diesel availability at about 30 percent in major urban areas and zero at some remote stations; some truck drivers were reportedly spending up to a week in queues.

What is materially different in 2026 is the severity of the external environment. The International Energy Agency has described the near closure of the Strait of Hormuz this year as the largest oil-supply disruption in history. It said flows through the strait fell from around 20 million barrels per day before the conflict to an average of 2.7 million barrels per day in March, April and May, while cumulative Middle East supply losses exceeded 1.3 billion barrels. Diesel markets have also been squeezed by refinery disruptions and Russian export restrictions.

This is not an abstract global story. In September, fuel shortages and queues were documented in several countries, including Russia, Indonesia and Mongolia. The existence of queues elsewhere does not absolve Malawi’s authorities of responsibility for domestic management. It establishes that the external shock is real and unusually large.

The economically defensible comparison

The two episodes therefore overlap, but they are not identical. Under Chakwera, global shocks were important, yet the prolonged shortages became increasingly tied to Malawi’s forex crisis, under-recovery in pump prices, accumulated arrears and weakened supplier credit. Under Mutharika, the country still faces the same forex and import-financing vulnerability, even after moving prices closer to cost recovery, but it is now confronting that vulnerability during an exceptionally severe global oil and diesel supply shock.

The correct conclusion is not that one administration faced a ‘domestic’ crisis and the other a ‘global’ crisis. Rather, Malawi has a structural domestic weakness that makes international shocks more damaging. The mix and intensity of the shocks have changed; the vulnerability has not.

What Malawi should learn

First, fuel security ultimately requires more foreign-exchange-generating production. Malawi cannot permanently solve a dollar-financed import problem without expanding exports in agriculture, mining, manufacturing, tourism and tradable services.

Second, fuel pricing should remain transparent and sufficiently cost-reflective to prevent another build-up of hidden arrears. If higher prices hurt vulnerable households, targeted social protection is economically preferable to indefinitely suppressing the pump price for every consumer.

Third, government, MERA and NOCMA should publish regular, comparable information on usable fuel stocks, expected shipments, Letters of Credit, forex requirements and corridor disruptions. Reliable information reduces panic buying and makes it easier for transporters and businesses to plan.

Finally, Malawi should diversify supply routes and suppliers, rebuild credible supplier relationships, maintain genuine strategic stocks and gradually reduce petroleum dependence through reliable electricity, public transport and renewable-energy investment.

Political debate will naturally ask who is to blame. The more useful economic question is why Malawi remains so vulnerable whenever international fuel markets or foreign-exchange availability deteriorate. Until that vulnerability is reduced, governments may change and global crises may change, but the risk of queues will remain.

AUTHOR BIO

Dennis Richard is a Malawian economist and economic and research consultant with interests in macroeconomic policy, development economics and applied research. The views expressed are his own. Email: deninhorichard.dr@gmail.com

EDITORIAL FACT-CHECK PACK | 4 OCTOBER 2026

Fact-Check & Source Notes

For: “Malawi’s Fuel Queues: What Is Global, What Is Domestic, and What Changed Between Chakwera and Mutharika?”

Purpose. This sheet is for editors and fact-checkers. The published op-ed intentionally uses newspaper-style source attribution rather than academic footnotes. Figures below are drawn from official institutions and reputable reporting.

Key claims at a glance

Claim	Evidence / interpretation
2022 forex shock	World Bank: widespread forex unavailability caused shortages of imported goods and fuel queues; gross reserves fell from US$605m (Aug 2021) to US$326m (Oct 2022), about 1.3 months of imports.
Pricing/arrears channel	World Bank: delayed price adjustments and below-cost pump prices contributed to arrears, cash-flow pressure and withdrawal of supplier credit; NOCMA arrears exceeded US$70m.
January 2026 pricing correction	Reuters/MERA: petrol and diesel were increased by roughly 42%, to K4,965/litre and K4,945/litre respectively, to reduce under-recovery and support sustainable imports.
Current Malawi proximate cause	Nation, citing Ministry of Energy and MERA: unhonoured Letters of Credit and wider forex financing gaps are directly disrupting imports. Reported combined national petrol/diesel use is about 2m litres/day.
2026 external shock	IEA: near closure of the Strait of Hormuz produced the largest oil-supply disruption in history; flows fell from ~20m b/d to ~2.7m b/d in Mar-May, with cumulative Middle East losses above 1.3bn barrels.
Neutral interpretation	Both periods combine external and domestic factors. The relative importance differs: persistent Chakwera-era shortages became strongly associated with forex, under-recovery and arrears; the present administration still faces forex/L-C constraints but under a more severe 2026 global physical-supply shock.

Source register

1. World Bank (31 Jan 2023) — In 7 charts: The Urgent Need for Macroeconomic Stabilization in Malawi. World Bank linked widespread forex unavailability in 2022 to fuel queues and reported gross reserves falling from US$605m in Aug 2021 to US$326m in Oct 2022 (about 1.3 months of imports).
https://blogs.worldbank.org/en/africacan/7-charts-urgent-need-macroeconomic-stabilization-malawi

2. World Bank (2025 Malawi Economic Monitor) — Malawi Economic Monitor. Insufficient forex, delayed fuel-price adjustments and logistics contributed to prolonged shortages; arrears led suppliers to withdraw credit lines; NOCMA arrears exceeded US$70m; the report discusses losses from below-cost fuel pricing.
https://documents1.worldbank.org/curated/en/099012625203049046/pdf/P50926919af6a5089188051de8491a1767d.pdf

3. IMF (2025 Article IV) — Malawi: 2025 Article IV Consultation. IMF discussed fuel prices below cost recovery, fuel-import losses/arrears and risks from suspended/weak cost-reflective pricing.
https://www.elibrary.imf.org/view/journals/002/2025/226/article-A001-en.xml

4. Reuters (20 Jan 2026) — Malawi hikes fuel prices for second time in four months. Petrol rose to K4,965/litre and diesel to K4,945/litre – roughly 42% increases – as MERA moved to prevent shortages and preserve scarce forex.
https://www.reuters.com/sustainability/boards-policy-regulation/malawi-hikes-fuel-prices-second-time-four-months-2026-01-20/

5. NOCMA (2026) — BADEA US$50 million revolving credit facility. NOCMA described the facility as a response to foreign-currency constraints affecting fuel imports.
https://www.nocma.mw/malawi-secures-50-million-credit-fund-to-tackle-fuel-shortages/

6. Nation Online (early Oct 2026) — Fuel queues resurface. Current Malawi shortage: Ministry of Energy cited unhonoured Letters of Credit due to forex scarcity; MERA cited financing gaps; reported average consumption about 2m litres/day combined; fuel retailers reported diesel availability around 30% in urban areas and zero at some remote stations.
https://mwnation.com/fuel-queues-resurface-3/

7. IEA (2026) — How global oil supplies have readjusted to help fill the huge gap left by the Strait of Hormuz shock. IEA calls the 2026 event the largest supply disruption in history; Hormuz flows fell from ~20m b/d pre-conflict to ~2.7m b/d in Mar-May; cumulative Middle East oil supply losses exceeded 1.3bn barrels.
https://www.iea.org/commentaries/how-global-oil-supplies-have-readjusted-to-help-fill-the-huge-gap-left-by-the-strait-of-hormuz-shock

8. Reuters (30 Sep 2026) — Russia extends diesel export ban until end of October. Russia extended diesel-export restrictions amid refinery disruption; the report situates the ban within broader global fuel shortages.
https://www.reuters.com/business/energy/russia-extends-diesel-export-ban-until-end-october-2026-09-30/

Suggested accompanying image

Times Group, 29 September 2026, ‘Dry pumps’: a current photograph showing long vehicle queues deep into the night at Mchengautuba Turn-off in Mzuzu.

Suggested caption: Motorists queue for fuel at Mchengautuba Turn-off in Mzuzu amid the September 2026 supply disruption. Photo: Times Group (use only with the publisher’s permission or if the receiving newsroom holds the necessary rights).

Image reference: https://times.mw/wp-content/uploads/2026/09/fuel-queue-860×311.jpg

Related Times article: https://times.mw/dry-pumps/

Rights note: Do not redistribute or attach this photograph to third-party outlets without permission. It is provided as an editorial image reference. Each receiving newsroom should preferably use its own recent Malawi fuel-queue photograph or obtain clearance from Times Group.

Editorial caution

• Do not describe the present shortage as purely global: current Malawi officials specifically cite forex and Letters of Credit.

• Do not describe the Chakwera-era crisis as purely domestic: the World Bank explicitly identifies the Ukraine war, cyclones and other external shocks alongside macroeconomic imbalances.

• Avoid claiming that “every country” has fuel queues. The defensible formulation is that multiple countries have experienced shortages/queues during the 2026 international energy shock.

• The Times photograph is a rights-managed editorial image reference, not a free-to-republish attachment.