Malawi Energy Regulatory Authority (Mera) has maintained fuel pump prices, upon observing recent trends in world petroleum products prices and changes in other macroeconomic fundamentals in the local market and their impact on energy prices.
The authority has maintained the prices as follows: Petrol at K834.60, Diesel 826.40 and Paraffin at K613.20.
In a statement issued yesterday signed by Mera Board Chairperson Leonard Chikadya, the board said it considered the economic negative impact by Covid-19 on consumers.
“The Board considered the economic negative impact the Covid-19 pandemic has on consumers’ spending power and how higher fuel prices would exacerbate the situation. Whilst noting the need to restore importers capacity vis-à-vis increased cost of importation, the Mera Board resolved to apply the Price Stabilisation Fund to meet the increased In Bond Landed Cost of petroleum products,” reads part of the statement.
Mera has since announced that it will continue observing the trends and conduct monthly reviews of fuel prices using the Automatic Pricing Mechanism.
“Mera Board, in observing movements of FOB prices, has noted the continued increase in the prices on the world market whose impact will be assessed in March 2021. Further, the Board has noted that the current PSF level might no longer cover increased importation costs if FOB prices remain high,” the statement reads.
One of the county’s economists Betchani Tchelani said while the move was expected, it has come at the right time, arguing prices of commodities will not go up.
“It has been largely expected especially if we considered the level of inflation in the country and also the level of change rate in the country. It has been largely expected there was going to be a stable price of fuel it hasn’t come as anything strange but it is good in general for purposes of planning in terms of organisations, businesses and even individuals.
“It is good because it means we are can plan ahead with our budgets it would have been bad, it would have been worrisome if it went up because that would have been inflationary it would have triggered the prices of commodities to go up. But in this case we should not expect the price of commodities to go up. It has come at a good time when just next month or so farmers will be harvesting anytime soon this means the level of inflation should be expected to go down good news to many of us especially in terms of prices of fuel,” he said.
In January 2021, the average FOB prices of Petrol, Diesel and Paraffin increased by 30.54%,27.44% and 28.43%, respectively, when compared to the averages obtained in the month of November 2020 used in determining the ruling pump prices.