By Isaac Salima:
Government is in a dilemma on whether to proceed to effect fuel and electricity price hikes.
This is because President Lazarus Chakwera, who has powers to make a final decision on all matters, is yet to put pen to paper on the issue of hikes.
Our sources say Chakwera received recommendations for both fuel and electricity tariff increases but that he has been hesitant to approve the same.
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“It is a political decision. The implications are huge politically if the hikes are effected,” the source said.
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He further said the President recently rejected a 30 percent fuel hike which the Malawi Energy Regulatory Authority (Mera) Board had approved.
“The President rejected it and asked the Mera Board to come up with other figures below 30 percent. The Mera Board is still discussing the issue,” our source said.
However, the source said it would not be practical for Mera to increase the fuel price by a rate of less than 30 percent, hence the delay to come up with new prices.
When we took the matter to the Office of the President and Cabinet, whose secretary Colleen Zamba heads the Mera Board, spokesperson for the office Robert Kalindiza was yet to respond to our questionnaire.
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Information Minister Moses Kunkuyu was also unavailable to comment as he is reportedly attending the United Nations General Assembly in United States of America.
Mera spokesperson Fitina Khonje recently confirmed that the board was consulting on the issue and that they would come up with a position once they were done with the process.
The fuel issue came in the limelight when Consumers Association of Malawi Executive Director John Kapito suggested that prices of petroleum products be adjusted upwards to tackle fuel importation challenges.
Mera, through its chief executive officer Henry Kachaje, admitted that the country’s fuel prices were on the lower side, a development that was said to be affecting their operations.
He said they owed fuel importers about K785 billion, an amount that has been accumulating through the sale of fuel at below- pump price.
This is happening at a time Chakwera is yet to make a final decision on the proposed electricity hike.
In December last year, government suspended a 40.92 percent electricity tariff hike which Mera had effected in November 2023.
The increase followed the 44 percent devaluation of the local currency.
Government officials then told journalists in Lilongwe that the suspension was a result of complaints from Malawians who had been squeezed following the increase in commodity prices as a result of the fall of the Kwacha.
Earlier this year, Energy Minister Ibrahim Matola told The Daily Times that Chakwera would make a final decision on the matter.
“We will wait for the President to tell us what to do. He is the one who ordered the suspension and now it is not about Mera or Escom but the President, who will direct us,” Matola said.
The development means Chakwera holds keys to the hikes.
Kapito yesterday said the country was making a big mistake by sitting on the recommendations to increase fuel prices.
“We are inviting fuel scarcity and long queues in pump stations. This may, in the end, hit hard the consumer. That is why I proposed a fuel hike in order to continue making the product available rather than inviting trouble to our economy,” Kapito said.
Political commentator George Phiri said the President was aware of consequences that would follow if the country proceeded to effect the hike.
“The repercussions, the impact of the fuel hike, will not do justice to the citizenry and the leadership is aware of this. And there is a need for proper balancing of the two,” Phiri said.
