By Deogratias Mmana
Fuel prices have gone up with effect from today, Malawi Energy Regulatory Authority (Mera) announced yesterday at a news conference in Lilongwe.
Mera Chief Executive Officer Henry Kachaje said petrol has now moved from K899.20 to K1,150 per litre representing 27.89 hike; diesel from K898 to K1,120 representing 24.72 percent and paraffin from K719.60 to K833.20 per litre representing a 15.79 percent increase.
The average hike for the three oil commodities is 22.8 percent.
Kachaje said several factors have contributed to the increase in pump prices.
They include the exchange rate of the kwacha against the United States dollar, changes in local factors that determine the maximum pump price on the landed cost of petroleum products and the combined effect of the movement of the Free On Board prices.
“Due to the above factors, the landed costs of petrol, diesel and paraffin increased,” Kachaje said.
Kachaje also said according to the Automatic Pricing Mechanism (APM), all the three products qualified for an upward price adjustment since the changes in their landed costs were beyond the plus or minus five percent trigger limit.
“In the October 2021 price review, the Mera Board has considered the changes in economic fundamentals outlined above and has resolved to adjust upwards pump prices of petrol, diesel and paraffin in line with the Automatic Pricing Mechanism effective October 10, 2021,” he said.
Director of Centre for Research and Consultancy Milward Tobias said the new fuel prices were expected considering the weakening of the kwacha against its trading partners.
“This means rising costs of commodities as fuel price is inflationary. Economy is run by transport. We need transport to move goods from area of production to markets. We need transport to get people to place of work and business,” Tobias said.
Tobias added that whenever a price of a component in the transport system goes up, prices of everything in the economy go up.
Tobias, however, indicated there is need for the political leadership to give solutions to stabilise the economy.
Mera last adjusted fuel prices in March this year.