Mera maintains fuel prices


By Mandy Pondani & Faith Kadzanja:


Malawi Energy Regulatory Authority (Mera) has maintained the country’s fuel prices despite indicators requiring an upward adjustment.

In a statement, Mera Chairperson, Bishop Joseph Bvumbwe, says the Price Stabilisation Fund has cushioned the prices.


The development means that petrol, diesel and paraffin prices remain at K868, K874 and K710.50 per litre, respectively.

According to Automatic Price Mechanism, fuel prices are expected to rise when there is more than five percent movement in Free on Board (FOB) price as well as exchange rate and inflation.

“In June 2019, the average FOB prices of petrol, diesel and paraffin increased by 19.90 percent, 9.21 percent and 5.34 percent, respectively, when compared to the averages obtained in December 2018 which were used in determining the ruling pump prices,” Bvumbwe says in a press statement released Sunday.


The statement adds that since the last review of the In Bond Landed Cost of petroleum products in January 2019, the Malawi kwacha has depreciated by 6.24 percent, trading at K786.09 to the United States (US) dollar from K739.78 to the US dollar.

Bvumbwe says Mera assessed the combined effect of the movement of FOB prices and exchange rate of the kwacha to the US dollar as well as changes in local factors that determine the maximum pump prices and noted that the landed costs of petrol, diesel and paraffin increased by 19.37 percent, 11.22 percent and 9.36 percent, respectively, in July 2019.

He says the changes in the landed costs qualified the three petroleum products for a price revision since the changes were beyond the plus or minus 5 percent trigger limit.

Bvumbwe says Mera Board resolved to cushion the impact of the increased landed cost of the three products through the stabilisation fund.

In a related development, Mera has maintained electricity tariffs at K88.02/ kilowatt after applying the Automatic Tariff Adjustment Formula (ATAF).

Jet-A 1 prices have also been upheld at K705.24 for Kamuzu International Airport and K655.61 at Chileka Airport.

Economics lecturer at University of Livingstonia, Chikumbusko Kayira, has said the fuel price stabilisation has little impact on the broader micro-economy since the kwacha continues to weaken in value against world currencies.

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