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The Road Transport Operators Association (RTOA) has expressed worry over suggestions that importing fuel by rail from the Indian Ocean port of Nacala in Mozambique is cheaper than road freight.
RTOA also says the apparent protectionist moves by government and other stakeholders who appear to have a bias on rail haulage over road transport will not promote a level-playing field in the sector.
The road hauliers also say this could undermine massive investments they have made in recent years to save the country when rail haulage was not reliable.
The Petroleum Importers Limited (PIL)—a cartel of fuel importing firms—said in April this year that based on the current fuel pricing structure, the imports by rail are cheaper than road and would go a long way in reducing the landing price of the commodity here.
PIL intends to contract the Central East African Railways (Cear) to resume fuel imports through rail which were suspended in 2004 due to poor port conditions at Nacala and other logistics problems dogging the railway operator.
But RTOA Vice-Chairman Aslam Gaffar said this week a separate study by the transporters’ body has found that road transport could be much cheaper than perceived and save the country scarce foreign currency.
“As RTOA, we must make it clear that we’re not against the deal between PIL and Cear. However, we also feel duty-bound to bare to the nation that fuel haulage by rail is not cheaper as compared to road freight, as is being promulgated,” he said.
The RTOA study indicates that one metric tonne of all fuel products costs about US$10 more by rail than road over an approximate distance of 800 kilometres between Nacala and Blantyre.
Between Nacala and Lilongwe—a distance of about 1,000 kilometres—rail transport will cost about US$20 more than road transport.
The study indicates that it costs US$82.54 per tonne to bring a tonne of diesel from Nacala by rail, US$82.39 for a tonne of paraffin and US$94.48/tonne for petrol over the same distance by rail.
In contrast, road transport costs US$78.780 between Blantyre and Beira also in Mozambique, a distance of about 850 kilometres, shows the study. Fuel allocations meant for Nacala now land at Beira due to the poor port conditions at Nacala.
RTOA says in the study that the railway costs US$96.85/tonne to bring diesel to Lilongwe from Nacala, US$96.70/tonne for paraffin and US$123.07/tonne for petrol. In contrast, road transport costs $95.21 for all fuel products between Beira and Lilongwe.
It further says that based on the previous experience, Cear insisted on being paid standing charges and refused to pay for any transit losses when, on the other hand, Malawian transporters do not demand standing charges and are paying for transit losses, reads the study.
“Whilst not wishing any bad to the Nacala rail corridor, it is important to have an alternative, especially since the railway is prone to wash-aways in times of floods and derailment,” it says.
Gaffar said following the suspension of imports through Nacala, road transporters sacrificed capital expenditure to increase their capacity for hauling fuel from Beira and Dar-es-Salaam.
He said such investment will be put to waste if stakeholders did not consider sharing the cake with road transporters.
Gaffar also bemoaned the influx of foreign road transporters in the country, saying they not only crowd out locals but they are also a drain on forex.
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