BP has been operating in Malawi since 1976, when it joined with Shell and a local company, the Oil Company of Malawi (Oilcom)
In 1978 BP bought Shell’s shares, thereby increasing its shareholding to 20%, with Press Corporation still maintaining its 80% shareholding. This led to the formation of a new company called Oilcom in April 1978, when BP signed a management contract with Press Corporation. Due to the high business potential that the Malawian market displayed over the years, BP acquired 30% shares from Press Corporation in 1999 to increase its shareholding in the company to 50%. As a result, all Oilcom retail sites are being re-branded to BP.
Oilcom has always been the market leader of the four companies operating in Malawi, commanding about 50% of the market share (1999). The other industry players are Mobil (30%), Caltex (13%) and Total (7%). A new addition to the market is Petroda. Pricing of fuels is still under government control. There is, however, a general pricing structure that has been agreed between the government and the oil industry in Malawi. There has also been partial liberalisation in the industry as far as product procurement is concerned. Until May 2000, all fuel imports were done by a government parastatal, Petroleum Control Commission, (PCC). Today, 80% of the country’s fuel is imported by Petroleum Importers Limited, (PIL), a private company owned by the oil companies in Malawi and managed through a body of directors from each oil company. The remaining 20% is still being imported by PCC. Malawi obtains most of its lubricants from the BPSMS blending plant at Willowvale, Zimbabwe, with a small quantity coming from BP Southern Africa. Pricing and procurement of lubricants are fully liberalised. Oilcom Malawi is the sole importer and supplier of aviation fuels in the country.
Malawi has an agro-based economy, which forms the bulk of Oilcom’s customers. Tourism is an important source of revenue and one of the country’s highlights is Lake Malawi which is 52 miles wide and 365 miles long. Oilcom is the only oil company with a network of service stations stretching from one end of the lake shore road to the other.