Fuel prices up

Buyers scramble for fuel

John Kapito

After eight-month hiatus on fuel price movements, the Malawi Energy Regulatory Authority (Mera) finally raised fuel prices yesterday in a move that some observers say was expected.

Following the energy regulator’s announcement, snap surveys The Daily Times conducted last night revealed that there were cases of panic-buying in some fuelling stations, with long queues at Kudya Filling Station in Blantyre City.

At Chichiri Round-about Filling Station, we were told that petrol and diesel had ran out. There was no one searching for paraffin. However, in Blantyre Central Business District, business went on as usual, as filling stations served customers without problems.


This marks the second time for fuel prices to rise this year, and only the third time since November 9 2019, when a litre of petrol was selling at K930, diesel at K924 per litre and paraffin at K710 per litre.

However, the prices plummeted by May this year and, when Mera effected a fuel price reduction on May 8, a litre of petrol was going at K690.50, diesel K664.80 per litre and paraffin K441.70. This represented a 12.31 percent reduction in the price of petrol and 13.10 percent decrease in the price of diesel.

Now, following the latest rise in prices, the price of petrol has jumped from K690.50 per litre to K834.60 representing 20.87 percent while that of diesel has gone up from K664.80 per litre to K826.40, which is a 24.31 percent increase. Paraffin’s price per litre has also been increased from K441.70 to K613.20, which is an increase of 38.83 percent.


Predictably, the increase in the price of petrol, diesel and paraffin has not surprised Consumers Association of Malawi Executive Director John Kapito, who has described the decision as expected.

He, however, said the margin could have been avoided if the increases were gradual.

“We knew that prices of fuel were going up on the international market and there was a need for the country to reciprocate the trends as they happen.

“A once-off increase of more than 20 percent on fuel is a huge blow to consumers because there are a lot of other products that will follow suit,” Kapito said.

However, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) opted to play a wait-and-see game until today.

MCCCI President James Chimwaza said they would be meeting today to assess the impact of the development on industry players.

Commenting on the development, TNM plc Head of Brand and Marketing Communications Louis Chipofya said the company’s projected returns would be affected following the increase.

“We are going to absorb the cost and do not plan to pass it on to our customers because we believe in creating a lot of possibility for our customers. So, we will take the knock.

“Definitely our projections, in terms of revenue, will be reduced because, mainly, we plan with expectation of a stable environment, a few changes here and there, but the bottom line is our customers will be protected,” Chipofya said.

This is the first time since July that Mera revised fuel prices following the dissolution of the Authorities board by President Lazarus Chakwera.

Making the announcement in a statement yesterday, Mera said the upward adjustment of fuel prices would take effect from mid-night.

Mera announced that petrol price was increased from K690.50 per litre to K834.60 representing 20.87 percent while Diesel price has gone up from K664.80 per litre to K826.40, which is a 24.31 percent increase. Paraffin price has also been increased from K441.70 a litre to K613.20 which is an increase of 38.83 percent.

This was announced during a press briefing in Lilongwe yesterday, where Mera officials stated that, among other necessitating factors, the Kwacha has been depreciating while international market prices have been increasing over the past months.

“Combining these two effects, it has been necessary to also adjust our prices because we can’t keep the prices lower than the prices at which we are importing the commodity because that will not be good for the country,” said Fitina Khonje, who is Mera Consumer Affairs and PR Manager.

She added that the authority could not continue to use the Price Stabilization Fund (PSF) because it was not enough to contain the price increase.

Khonje, however, stressed that, at the moment, the PSF had not been depleted.

She however, acknowledged that, if the authority continued to use it to contain the prices, it could have been depleted— creating a situation that would be “disastrous” in an event that some shocks happen.

“It has been necessary not because anybody wanted a price increase but because, just like any other commodity, you cannot sell a commodity below the price which you are using in procuring,” she said.

According to the United States Bureau of Labour Statistics’ Monthly Labour Review for October 2020, prices of fuel have been rising throughout the world.

It says, at first, fuel prices dipped because the emergence of the Covid-19 pandemic affected energy prices for products ranging from crude oil to various refined petroleum products, such as heating oil, jet fuel, diesel fuel, retail gasoline, and gasoline at the pump.

On January 7 2020, officials in China announced that they had identified a new virus in the Hubei region and this, according to the bureau, resulted in economic activity slowing “sharply across the globe”, demand for petroleum and petroleum products plummeted.

“The onset of the pandemic led to an initial drop in prices for petroleum-based products, and then, just as abruptly, prices rose sharply as producers limited production and demand increased,” reads the Monthly Labour Review.

After Mera’s announcement yesterday, motorists scrambled for fuel at fuelling stations in Blantyre City, among other places, in their bid to get litres at old prices.—Additional reporting by George Gausi

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