Mera cuts diesel, paraffin prices
Malawi Energy Regulatory Authority (Mera) Sunday cut the price of diesel and paraffin for the first time in 14 months but kept the price of petrol unchanged
The price slash saw a litre of diesel going down by K37 from K924 to K887 while the price of a litre of paraffin softened from K710.50 to K693.60.
Diesel is mostly used by heavy duty vehicles while paraffin is mostly used by poor households in villages.
Mera said in a statement signed by Chairperson Joseph Bvumbwe and Chief Executive Officer, Collins Magalasi, that in February this year the free on board price of petrol, diesel and paraffin decreased by 7.10 percent,13.63 percent and 10.60 percent respectively, when compared to FOB prices which were applied when determining the ruling prices.
Mera adds that since the last In Bond Landed Cost (IBLC) review in November 2019, when pump prices were last revised, the Malawi Kwacha has slightly depreciated by 0.25 percent to K743.87 to the dollar from K742.01 to the dollar.
It says after assessing the combined effect of the movement of the FOB prices and exchange rate of the Malawi Kwacha to the United States Dollar as well as changes in local factors that determine the maximum pump prices it was noted that the landed costs of petrol, diesel and paraffin decreased by 3.19 percent, 7.35 percent and 5.51percent, respectively.
“According to the Automatic Pricing Mechanism (APM), diesel and paraffin qualified for a price adjustment since the changes in their landed costs were beyond the ±5 percent trigger limit.
“Therefore, in line with the APM, the Mera Board resolved to revise downwards the pump prices of diesel and paraffin effective March 8, 2020,” reads the statement from Mera.
The slash in the price of diesel has pleased lorry and truck drivers who will now spend less for the gas.
“It is good news although we would have loved if Mera could have cut the price by a bigger margin,” said Mathias Mbewe, a bus driver in Lilongwe.
The last time Mera slashed fuel prices was on January 12, 2019
In November last year, Mera hiked fuel prices after months of stability at a time fuel prices on the international market were easing.
With most buses running on diesel, it remains to be seen whether the diesel price cut will induce a drop in bus fares.
