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Cama fears for fuel price hike

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John Kapito

The Consumers Association of Malawi (Cama) has said the rising price of fuel on the international market could impact local prices in the medium to long term.

Speaking on the sidelines of a media interaction on fuel prices on Wednesday, Cama Executive Director, John Kapito, said since international oil prices hit rock bottom at the pick of Covid-19 the cost of the commodity has been picking up in recent months as economies start reopening up.

“We have noted that on the international market the price of oil has been increasing as economies begin to open up after Covid 19 lockdowns. Again we have noted that the kwacha has been falling. Definitely they would have to increase fuel prices any time.

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“Maybe the only reason why prices are not moving up now is because Mera does not have a board. But for a long time, we have been cushioned by the Price Stabilisation Fund, we don’t think that it can sustain us for too long,” Kapito said.

The Cama Chief has since appealed to President Lazarus Chakwera to move with speed in appointing a board for the Malawi Energy Regulatory Authority (Mera) to look at the prevailing fuel prices and make the necessary adjustments, if any.

Kapito said delays in revisiting the local fuel prices could hurt the consumer in future as they would be hit by a once off big jump in fuel prices.

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“Any fuel price hike would hurt consumers but when it is gradual, the pain is less. Again, we don’t want a repeat of a situation which we had in 2012 where we were all sleeping at filling stations because there was no fuel in the country because one person, a politician, had made a decision to sell the fuel at less than the price of importation.

“I would rather say that let it hurt consumers with a true cost than not having the product at all. You are going to hurt people more if you don’t have fuel in the country because nothing will move in this country. People will lose jobs and that’s more dangerous than a fuel hike,” Kapito said.

Asked as to why Malawi did not take advantage of the time fuel prices hit rock bottom to buy in bulk, Mera Director of Economic Regulation, Chimwemwe Dunkalo, said the country could still have problems at that time to transport the commodity as the ships used in ferrying the oil from where it is produced were just being used as storage facilities.

“There was no way we could have taken advantage of such a scenario,” Dunkalo said.

Reuters reported on Tuesday that oil prices edged higher as better than expected US manufacturing activity data spurred hope for a post-pandemic economic recovery, and as analysts forecast a sixth weekly drawdown in US crude inventories.

Brent crude LCOc1 futures settled up 30 cents at $45.58 a barrel. US West Texas Intermediate futures CLc1 settled at $42.76 a barrel, up 15 cents.

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