Where Malawi’s fuel dollars go: Haulage, middlemen and routes.

Follow the dollar, not just the exchange rate.

Malawi’s forex debate is almost entirely about how many dollars come in. This article asks a second question: how many leave unnecessarily on the journey between a foreign refinery and a Malawian pump?

The first article in this series argued that the fuel queues are the child of a six-year forex crisis. That debate usually stops at the exchange rate, tobacco earnings and the IMF. But every litre of petrol and diesel carries a chain of dollar payments: the product itself, the trader’s premium, sea freight, port charges, and the long inland haul.

Some of those payments are unavoidable. Others are choices: who moves the fuel, who sells it to us, and which route it takes. Those choices are where practical forex savings lie.

The volumes and the bill.

Malawi burns roughly 720 million litres of petrol and diesel a year, about 570,000 tonnes, and the Reserve Bank put the annual fuel import bill at about US$600 million in 2025.

The Ministry of Energy’s working figure is one million litres of each product a day (The Nation, 2026e). Converted at standard densities (petrol 0.745, diesel 0.835 kg/litre), that is about 570,000 tonnes a year. The import tenders roughly agree: NOCMA sought 412,000 tonnes for 2026/27, and the Petroleum Importers Limited (PIL) consortium sought 176,300 tonnes, for a combined 588,300 tonnes (The Nation, 2025b). NOCMA’s latest tender, issued on 1 October 2026, seeks a further 440,000 tonnes (The Nation, 2026e).

The Reserve Bank’s US$600 million estimate predates the 2026 Hormuz price shock (The Nation, 2025a), so this year’s bill is almost certainly higher. Against total forex earnings, which the Bank puts at about US$1 billion, fuel alone absorbs around 60%.

Every tonne that reaches a Malawian depot carries four layers of dollar cost:

1. The product at the international benchmark price, non-negotiable for a non-producer.
2. The supplier’s premium over that benchmark, covering sea freight, insurance and the trader’s margin.
3. Financing charges when suppliers extend credit because Malawi cannot pay on time.
4. Inland haulage from Beira, Nacala, Dar es Salaam or Tanga to Malawian depots.

The first layer is fixed by the world. Malawi has some control over the other three, and this article looks at that.

The haulage bill paid in dollars.

On MERA’s own rates, foreign-owned tankers earn roughly US$83–98 million a year hauling Malawi’s fuel, paid in hard currency.

Three facts anchor the estimate. First, MERA data cited by NOCMA show Malawian transporters carried 64.95% of fuel in April 2026, leaving about 35% to foreign trucks (The Nation, 2026c). Second, NOCMA says it uses only Malawian trucks on the Mozambican routes, so the foreign share sits almost entirely on the Tanzanian corridor. Third, MERA’s revised freight schedule of 31 July 2026 sets a separate rate for foreign transporters, payable in US dollars at the official rate of MK1,751 (MERA, 2026). On the Tanga–Lilongwe route that rate is MK677.13 a litre, or US$13,535 for a 35,000-litre load — almost exactly the US$13,500 per trip that the Transporters Association of Malawi (TAM) cites (The Nation, 2026b).

At 35,000 litres a load, 720 million litres needs about 20,600 tanker trips a year. Because foreign trucks operate the Tanzanian corridor, the dollar bill depends on the foreign share and whether the fuel lands in Dar es Salaam or Tanga (Table 1).

Table 1: Estimated dollars paid to foreign hauliers, by scenario.

Scenario	Foreign share of volume	Foreign-hauled litres a year	Paid to foreign hauliers (US$ million)
TAM’s account, applied nationally (upper bound)	60%	432 million	143–167
MERA, April 2026	35%	252 million	83–98
MERA’s own 85% local target	15%	108 million	36–42
All-Malawian haulage	0%	0	0

Source: author’s calculations from MERA (2026) foreign-transporter rates at MK1,751 per US$, with deliveries split Mzuzu 20%, Lilongwe 40%, Blantyre 40%. The low figure assumes Dar es Salaam, the high figure Tanga.

The figures are contested. TAM says Tanzanian trucks carry 95% of fuel into NOCMA depots; NOCMA says the national local share is 65%. The difference is partly definitional — NOCMA’s depots versus all importers — and MERA should publish the monthly breakdown so the argument can be settled with data.

Two cautions keep the arithmetic honest. First, the April 2026 shares are a single month’s snapshot, and they are disputed. Second, a Malawian truck isn’t dollar-free: it buys some diesel, tolls, and parts abroad. If a third to a half of a local trip’s cost still leaks as forex, the true net saving from the MERA scenario to the 85% target is roughly US$22–36 million a year, not the full gross difference of US$48–56 million.

Malawian transporters: the capacity is shrinking, not missing

The local fleet has fallen from about 850 fuel tankers in 2020 to around 350 today, and the policy environment is driving the decline.

TAM reports the Malawi-registered fuel fleet fell to about 450 tankers, then lost a further 100 after MERA cut haulage rates by 11–19% from 1 August 2026 (MERA, 2026; The Nation, 2026d). Operators say they are moving to dry cargo, where a Dar es Salaam trip is more profitable.

Three structural disadvantages explain why local trucks lose out even on home soil:

• They are paid in kwacha, while their competitors are paid in dollars. Exchange-control rules require local businesses to be paid in local currency. But Malawian hauliers must buy foreign currency for costs incurred in Tanzania and Mozambique, often on a parallel market TAM says runs at more than double the official rate. Foreign hauliers receive dollars at the official rate for the same work. MERA’s August 2026 schedule widens the gap: on 13 of its 14 routes the foreign rate is 3–11% below the local one (MERA, 2026).
• Loading queues at foreign ports. TAM says Malawian trucks wait weeks to load in Dar es Salaam while Tanzanian trucks complete several round trips (The Nation, 2026b). Earlier in 2026, about 70 Malawian trucks reportedly waited nearly four weeks at Nacala (The Nation, 2026a).
• The most expensive diesel in the region. An interpretive point: a truck fuelling in Malawi at K5,863 a litre competes with one that fills up at home far more cheaply. The haulage rate, set in kwacha, has to absorb that gap.

How much could the local fleet carry? On illustrative assumptions — 35,000 litres a load and about 25 round trips a year on the Tanzanian corridor — 350 tankers can move roughly 300 million litres, under half of national demand. Around 700 tankers would cover the MERA 85% target even if every load ran the long Tanzanian corridor; shorter Mozambican routes need fewer. The capacity gap is real, but it emerged over the last six years and can be reversed.

NOCMA’s procurement: what the middlemen cost.

Buying directly from producers has cost Malawi about US$100 a tonne less than buying through traders — worth roughly US$50–60 million a year at national volumes.

NOCMA mostly buys through open tenders, where international traders quote a premium over the benchmark price, delivered to a regional port. In July 2025 NOCMA disclosed the gap between those traders and the state producers it had begun buying from under government-to-government (G2G) deals (Table 2).

Table 2: Supplier premiums disclosed by NOCMA, July 2025 (US$ per tonne, CIF)

Supplier route	Diesel premium	Petrol premium
Main open-tender supplier	175.71	185.90
OQ Trading, Oman (G2G)	77.17	69.89
Difference	98.54	116.01

Source: The Nation (2025a).

Applied to about 570,000 tonnes a year, a gap of roughly US$100 a tonne is worth about US$57 million annually — before any savings on haulage. On NOCMA’s current 440,000-tonne tender alone, it is about US$44 million.

Other costs sit on top of the premium:

• Financing charges. Under one open-credit contract, NOCMA confirmed paying US$40 a tonne for supplier-arranged financing, which it described as a financing cost rather than an extra premium (Platform for Investigative Journalism, n.d.). That is the price of not paying on time; it disappears when Malawi can open letters of credit.
• Intermediated “direct” deals. In 2024, a proposed UAE deal routed through a special-purpose vehicle was reported at US$295 a tonne against a highest tender bid of US$195 (Times, 2024). This was a reported allegation; it shows that a deal labelled direct is not automatically cheaper.

The G2G route has limits. It still requires letters of credit, and the second 2025 G2G cargo slipped from August to November because of credit delays (allAfrica, 2025). The ADNOC and OQ arrangement was planned for an initial 12 months (Malawi Broadcasting Corporation, 2025). NOCMA’s October 2026 call is an open competitive tender, and opposition figures say the G2G route has been abandoned; the sources reviewed for this article contain no official statement either way.

Routes: the long way round is the expensive way round

On MERA’s own rates, moving a litre from Tanga to Blantyre costs more than twice as much as moving it from Beira.

MERA’s revised road freight rates, effective 1 August 2026, set out the gap (Table 3). They are quoted in kwacha per litre for each port and depot, with a separate rate for foreign transporters that is paid in dollars (MERA, 2026). Press reports describing them as rates per tonne per kilometre were mistaken.

Table 3: MERA road freight rates by route, effective 1 August 2026 (MK per litre)

Loading port	Depot	Local rate	Change from April 2026	Foreign rate (paid in US$)	Foreign vs local
Tanga	Blantyre	794.58	−14%	728.25	−8%
Tanga	Lilongwe	712.79	−16%	677.13	−5%
Tanga	Mzuzu	612.44	−14%	580.22	−5%
Tanga	Chilumba	573.23	−11%	536.10	−6%
Dar es Salaam	Blantyre	672.06	−14%	625.65	−7%
Dar es Salaam	Lilongwe	602.08	−14%	568.48	−6%
Dar es Salaam	Mzuzu	514.91	−14%	500.62	−3%
Dar es Salaam	Chilumba	481.62	−19%	492.32	+2%
Nacala	Blantyre	387.55	−11%	360.23	−7%
Nacala	Lilongwe	454.16	−12%	414.74	−9%
Nacala	Mzuzu	536.21	−11%	478.50	−11%
Beira	Blantyre	372.62	−12%	353.18	−5%
Beira	Lilongwe	419.75	−17%	407.69	−3%
Beira	Mzuzu	490.80	−17%	471.45	−4%

Source: MERA (2026), letter MERA/ER/11/9 of 31 July 2026. Foreign rates convert at MK1,751 per US$.

For the south and centre, the gap is stark. Trucking a litre to Blantyre costs MK794.58 from Tanga and MK672.06 from Dar es Salaam, against MK387.55 from Nacala and MK372.62 from Beira. For Lilongwe, Beira (MK419.75) is about 40% cheaper than Tanga (MK712.79). Only for Mzuzu and Chilumba are the corridors close, so the northern ports still make sense for the north. Tanga is the most expensive port for every destination.

Tanga has been used because G2G cargoes berth there and because Dar es Salaam is congested, not because it is the cheapest route. A route comparison using MERA’s local rates (Table 4) puts numbers on the choice. It assumes 50 million litres a month, split Mzuzu 20%, Lilongwe 40%, and Blantyre 40%, and compares bringing it all through Dar es Salaam versus bringing it through Beira (Fuel Transport Cost Comparison, 2026).

Table 4: Monthly road freight cost, Dar es Salaam versus Beira (US$, MERA local rates)

Destination	Monthly litres	Via Dar es Salaam	Via Beira	Saving
Mzuzu	10 million	2,940,662	2,802,970	137,693
Lilongwe	20 million	6,876,985	4,794,403	2,082,581
Blantyre	20 million	7,676,299	4,256,082	3,420,217
Total	50 million	17,493,946	11,853,455	5,640,491

Source: Fuel Transport Cost Comparison (2026), from MERA (2026) local rates; 35,000-litre tankers; MK1,751 per US$.

Routing through Beira saves US$5.64 million a month, or US$67.7 million a year, 32% of the Dar es Salaam road freight bill. Per 35,000-litre load, the saving is US$5,985 to Blantyre and US$3,645 to Lilongwe, but only US$482 to Mzuzu. Scaled to the 720 million-litre national figure, it is about US$81 million a year. Measured against Tanga rather than Dar es Salaam, the same calculation gives US$106 million a year (43%) on 600 million litres.

Three caveats apply. These figures cover road freight costs only; they exclude port, handling, storage, and insurance charges, as well as delays. Beira needs the berth and storage capacity to take a larger share. And a lower freight bill is not the same as a forex saving: on Malawian trucks paid in kwacha, it mainly lowers the landed cost, while the dollar saving arises only where the fuel would otherwise have moved on foreign trucks. At MERA’s foreign rates, the same shift would be worth US$61 million a year on 600 million litres if every litre were foreign-hauled.

Rail adds to the case. NOCMA’s October 2026 tender requires Nacala cargoes to move by rail to the Lilongwe and Blantyre strategic reserves (The Nation, 2026e). Economist Velli Nyirongo cautions that infrastructure limits, delays, handling, and border charges can erode rail’s advantage, so the savings depend on how reliably the line performs. Former Escom chief executive Kandi Padambo has proposed a dedicated pipeline alongside greater rail use (Nyasa Times, 2026).

The savings arithmetic

Taken together, the levers in Malawi’s control could keep roughly US$70–140 million a year at home, about one and a half to three months of the fuel import bill.

Table 5: Estimated annual forex savings by lever

Lever	Basis	Saving (US$ million a year)
Producer-direct (G2G-level) premiums	~US$100/tonne × 570,000 tonnes	30–57
Local haulage: 35% foreign share cut to 15%	144 million litres at MERA foreign rates, net of local trucks’ own forex use	22–36
Local haulage: all-Malawian (October 2026 tender rule)	252 million litres, net	39–63
Route: Lilongwe and Blantyre supplied via Beira, not Dar es Salaam	US$61m a year at foreign rates on 600 million litres × 15–35% foreign share	9–21
Pay on time, avoid supplier financing charges	US$40/tonne on NOCMA’s 440,000-tonne tender	10–18

The levers overlap; a litre moved from a foreign truck at Dar es Salaam to a Malawian truck at Beira appears in both the haulage and the route rows, so the rows should not simply be added. The low end of the range combines partial premium savings, the 85% local target, a partial route shift, and on-time payment; the high end assumes producer-direct supply, all-Malawian haulage, and on-time payment, with the route saving already included in the haulage figure. Separately from forex, the route shift alone would cut the national road freight bill by US$68–81 million a year, and, since freight is part of the landed cost, could lower pump prices.

Every figure here rests on published claims and stated assumptions, not audited data. The point is not the precise number. Even the conservative end matches the US$50–120 million credit facilities Malawi spends months negotiating, and it is money that does not have to be repaid.

The political economy: why the cheaper option keeps losing.

The costly choices persist because their costs are spread thinly across every motorist and the national reserves, while their gains are concentrated in a few hands that are organised, close to decision-makers and present at every tender.

This is the classic pattern of collective action: a US$ 100-per-tonne premium costs each Malawian a few kwacha per litre, too little to mobilise anyone, but worth tens of millions of dollars a year to whoever captures it. The three choices examined above each follow that logic, though not only that logic. What follows separates documented facts from interpretation.

Local or foreign trucks

Documented. For years NOCMA bought fuel on delivered terms (delivered duty unpaid, later delivered at place unloaded), under which the supplier, not Malawi, chose and paid the hauliers. Local operators protested from 2020 that this favoured Tanzanian fleets, and the High Court outlawed the delivered-duty-unpaid system in August 2024 (The Nation, 2026b). In 2021 MERA estimated that two supply contracts would cost taxpayers K45 billion more because of that system (The Nation, 2021). NOCMA’s own stated rationale has been speed: choosing whichever transporters reach the depots fastest (The Nation, 2023). MERA’s August 2026 schedule sets foreign transporters’ rates below local ones on 13 of 14 routes, by 3–11%, payable in US dollars at the official rate of MK1,751 (MERA, 2026).

Interpretation. Officials are judged by queue length, not the size of the dollar bill. When the pumps run dry, the fleet that loads first wins, regardless of the currency it is paid in. Bundled delivery contracts also suit everyone at the table: the importer outsources logistics risk, the supplier earns a trucking margin, and foreign hauliers receive dollars at the official rate. The cost lands on the reserves, which have no seat at the table. The rate schedule sharpens the incentive. An importer minimising its kwacha bill can save up to 11% a litre by hiring a foreign truck and paying in the one currency the country lacks. With the parallel rate, by TAM’s account, more than double the official one, a dollar paid at MK1,751 is also worth more to the foreign haulier than its kwacha equivalent is to a local one.

Middlemen or direct purchase

Documented. In 2021, the Anti-Corruption Bureau halted a NOCMA fuel tender after complaints of suspected corruption. NOCMA’s then deputy chief executive said government officials, including presidential aides and Cabinet ministers, had tried to influence supplier selection; MERA said the favoured bidders quoted higher premiums than rivals (The Nation, 2021). In November 2024, President Chakwera said his shift to G2G procurement disadvantaged those who had benefited from open-tender fuel and fertiliser deals (The Nation, 2025c). In September 2025 he alleged that people at NOCMA had conspired with agents to frustrate the G2G arrangement (allAfrica, 2025). These were allegations, not findings.

Interpretation. Traders are not only rent-seekers. They offer what state producers rarely do: credit, flexible cargo sizes and willingness to carry Malawi’s payment risk. A country that pays late will keep paying traders a premium for that patience. But crisis is also an opportunity for discretion. Emergency procurement relaxes competition, and the 2024 UAE proposal routed through a special-purpose vehicle shows that a deal labelled “direct” can still use an intermediary. Direct buying only saves money if it comes with payment discipline and transparency.

Northern or southern routes

Documented. NOCMA has tendered by corridor: in 2021 the contested awards were split into a Northern Corridor lot and a Beira Corridor lot (The Nation, 2021). G2G cargoes have berthed at Tanga (The Nation, 2025a). MERA’s rates make Tanga the most expensive loading port for every destination in Malawi (MERA, 2026).

Interpretation. Route choice often follows the supplier rather than the map. A trader with storage, finance, and trucking relationships at one port bids for that corridor, and the contract locks in the route. Diplomacy matters too: Tanzania is a reliable partner with deep ports, while Mozambique’s corridors carry security, port-capacity and single-rail-operator risks that officials can cite to justify the longer road. Some of those risks are genuine; the question is whether they are priced or merely asserted.

Protection has its own risks

An honest account must apply the same lens to local hauliers. A guaranteed 85% share creates a new protected market, and protected markets attract politically connected owners and cartel pricing. The aim should be competition among Malawian transporters for that share, with allocation lists, rates and performance published, not a closed club replacing a foreign one.

Progress, and eight specific recommendations.

Policy is already moving in the right direction; the task now is enforcement, transparency, and a level playing field for Malawian hauliers.

Credit where it is due. The High Court outlawed the delivered-duty-unpaid system that favoured foreign hauliers in August 2024. In April 2026, MERA agreed to allocate 85% of contractual volumes to Malawian transporters. NOCMA’s October 2026 tender goes further: Malawian transporters must move Dar es Salaam and Beira cargoes, and Nacala cargoes must move by rail; bidders are invited to offer 180-day credit and non-dollar payment (The Nation, 2026e). The 2025 G2G deals proved producer-direct supply is cheaper.

What should follow:

1. MERA: publish the haulage data monthly. Volumes by corridor and by transporter nationality, published alongside the freight-rate schedule, would settle the 65% versus 95% dispute with facts.
2. NOCMA: enforce and report the October tender’s transport clauses. A quarterly compliance report should show what share of each corridor actually moved on Malawian trucks and by rail.
3. Reserve Bank: level the currency field. Licensed local fuel hauliers should receive a documented forex allocation for en-route costs abroad, so they don’t buy dollars on the parallel market to compete with foreigners paid in dollars.
4. MERA: review the August 2026 rate cut and the foreign-rate discount against a published cost model. The model should reflect diesel bought at Malawian pump prices; a rate that drives 100 tankers off the road raises the dollar bill, and a schedule that makes foreign trucks cheaper in kwacha than Malawian ones rewards spending dollars.
5. Ministry of Energy and NOCMA: return to producer-direct supply and publish every premium. The premium per tonne on each contract should be public, as procurement law intends, so the public and regulators can compare traders’ margins.
6. NOCMA: set a minimum share for southern ports. Contract berth windows at Beira and Nacala and rail capacity in advance, rather than defaulting to Tanga. On MERA’s own rates, Beira saves US$3,600–6,000 per load to Lilongwe and Blantyre.
7. Ministry of Finance: protect on-time payment. The US$40-a-tonne financing charge reflects the cost of arrears; a ring-fenced fuel forex window, as argued in the first article, would remove it.
8. Ministry of Energy, PPDA and NOCMA: publish beneficial ownership. Name the ultimate owners of every fuel supplier, special-purpose vehicle and haulage contractor that wins NOCMA business. Sunlight is the cheapest defence against concentrated interests, local or foreign.

Assumptions used in the calculations: freight rates from MERA (2026), converted at the official rate of MK1,751 per US$; 35,000 litres per tanker load; deliveries split Mzuzu 20%, Lilongwe 40%, Blantyre 40%; densities of 0.745 (petrol) and 0.835 (diesel) kg/litre; about 25 round trips a year per tanker on the Tanzanian corridor; local trucks spend a third to a half of trip costs in foreign currency.

Disclosure: the author is Managing Director of LAB20 Group, whose logistics subsidiary has evaluated entry into fuel haulage.

References

allAfrica (2025) ‘Malawi: G2G fuel delayed, now expected in early November – Nocma’, 30 September. Available at: https://allafrica.com/stories/202509300226.html (Accessed: 8 October 2026).

Fuel Transport Cost Comparison (2026) ‘Malawi fuel transportation cost comparison: Dar es Salaam (Tanzania) vs Beira (Mozambique), MERA local transporter rates effective 1 August 2026’. Unpublished analysis.

Malawi Broadcasting Corporation (2025) ‘Additional G2G fuel trucks enter Malawi’. Available at: https://mbc.mw/additional-g2g-fuel-trucks-enter-malawi/ (Accessed: 8 October 2026).

Malawi Energy Regulatory Authority (MERA) (2026) ‘Revised road freight rates’, letter MERA/ER/11/9 to the Fuel Tankers Operators Association, Transporters Association of Malawi and others, 31 July. Lilongwe: MERA.

Nyasa Times (2026) ‘Malawi’s fuel shortage is a forex crisis wearing a different face’, 1 October. Available at: https://www.nyasatimes.com/malawis-fuel-shortage-is-a-forex-crisis-wearing-a-different-face/ (Accessed: 8 October 2026).

Platform for Investigative Journalism (n.d.) ‘When NOCMA signs fuel contracts, zeros are added to the contract sum, at whim’. Available at: https://www.pijmalawi.org/show-story/when-nocma-signs-fuel-contracts-zeros-are-added-t (Accessed: 8 October 2026).

The Nation (2021) ‘ACB stops Nocma fuel supply deals’, 10 June. Available at: https://mwnation.com/acb-stops-nocma-fuel-supply-deals/ (Accessed: 8 October 2026).

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