The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has projected a possible fuel price hike in coming weeks as global prices surge.
On the international market, fuel prices have been on the rise.
For instance, West Texas Intermediate (WTI) crude oil price trends indicate that the commodity reached $59.47 per barrel as of Friday February 14 2021.
The price is higher than $47.62 per barrel recorded at the beginning of 2021.
It has also come close to trends in 2020, when oil registered an opening price of $61.17 per barrel and closed at $48.52 per barrel.
In an interview, MCCCI Chief Executive Officer Chancellor Kaferapanjira said factors that affect movement of prices in the country have been affected by global fuel price trends, especially the Free on Board (FoB) prices.
He said prices of oil declined in 2019 due to subdued demand as most economies were on lockdown due to the first wave of the Covid pandemic.
Kaferapanjira added that price factors could also be triggered by reduced production of the commodity in producing countries.
“We should be prepared for fuel price hikes because we are looking at the behaviour of fuel prices. There are two major determinants: FoB price and exchange rate.
“The exchange rate has been stable but the FoB price is what is determining the prices mainly,” Kaferapanjira said.
In a response to an emailed questionnaire, Malawi Energy Regulatory Authority (Mera) spokesperson Fitina Khonje said Mera board would meet at an appropriate time to assess the impact of the determinants on the landed cost of fuel in the country.
“The Mera Board shall decide whether there should be price adjustments as well as whether the Price Stabilisation Fund (PSF) has adequate funds to cover the losses,” Khonje said.
Meanwhile, she has said the country’s storage facilities have fuel stocks for approximately 40 days and that importers have supply contracts through the three ports of Beira, Nacala and Dar-es-Salaam that are still running with volumes, hence no need to panic.
In December last year, Mera adjusted upwards fuel prices citing trends in the world.
Currently diesel is being sold at K826.40 per litre while petrol is selling at K834.60 per litre.