Consumers are facing with a sharp rise in prices of commodities following the 44 percent devaluation of kwacha effective Thursday this week and a hike in fuel prices 24 hours later.
Friday, the Malawi Energy Regulatory Authority (Mera) announced new fuel prices with petrol fetching K2, 530 per litre from K1746 (a 44.9 percent rise); diesel at K2,734 per litre, up from K1, 930 (42.4 percent increase) while paraffin is at K1910 from K1261 (up by 51.47 percent).
According to a statement signed by Mera Board Chairperson Reckford Kampanje, the decision had been arrived at in light of the 44 percent devaluation of the local currency and taking into consideration prices on the global market.
“All operators are required to sell petroleum products at prices not exceeding the above maximum prices,” read a statement signed by Kampanje.
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The energy regulator further said in line with the Automatic Tariff Adjustment Formula (Ataf), the 18 percent electricity tariff adjustment that was effected in September when electricity price rose to K123.26 now translates to K173.70 effective Friday.
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The hike of the fuel prices automatically led to the upward adjustment of transportation across the country.
Random spot checks within the city of Blantyre established that bus fares had doubled.
A bus fare from Limbe to Blantyre has gone up to K1000 from K500 and for Machinjiri to Blantyre, from K600 to K1000.
In separate interviews minibus operators said the price hike was inevitable, arguing that things are getting tough in the country.
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“We have no choice but act accordingly. We cannot make profits if we operate on the same fares as we did Friday before the price changes.
“It is tough for everyone and very unfortunate because at the rate we are going it will be difficult because in doing this business the aim is the vehicles should sustain themselves but in this case balancing what is being invested and the returns will be hard,” said one of the drivers.
Castel Malawi has also effected new prices on some of its products.
Commenting on the developments, Consumers Association of Malawi (Cama) Executive Director, John Kapito said there is nothing that can be done to control the situation.
Malawians should simply find ways to adapt, he said.
“There is nothing that Malawians can do. We are on the receiving end. Whatever damage has been done, we will go through. This is something we cannot manage on our own. What our leaders have done is take out all the control we have. All we can control is how we cope and adapt. At the moment it is like we are at a funeral. There is really nothing that can be done,” he said.
On Thursday, Principal Secretary in the Ministry of Trade and Industry, Christina Zakeyo warned against unreasonable adjustment of prices for goods and services by traders.
“Some traders have even temporarily closed their businesses in order to adjust prices for old stock that were already in shelves and warehouses before the devaluation,” she bemoans.
Meanwhile, Malawi Congress of Trade Unions (MCTU) has demanded that salaries should also be increased following the increased cost of living.
In a statement, MCTU President Charles Kumchenga and secretary general Madalitso Njolomole said government should increase minimum of wage of K100,000 by 44 percent.
“Employers and trade union representatives at enterprise level must immediately call for meetings where salary revisions must be the main agenda. MCTU proposes a minimum revision of salaries with 44 percent,” reads the Statement.
In reaction, Minister of Information Moses Kunkuyu said the government has noted the concerns raised.
“Every devaluation is a result of a process. Indeed, indeed where pros and cons of the devaluation are weighed. This devaluation is also an outcome of a process which was reached after being satisfied that this is the necessary evil that will bring a positive u- turn in our economy.
“The Hon Minister of Finance will give an update on Monday on the steps that are being taken to cushion Malawians against the effects of the devaluation,” Kunkuyu said.
