The country’s Malawi Energy Regulatory Authority (Mera) has for the second time maintained fuel prices’ adjacent amid depreciation of the currency Kwacha.
This means that the prices of petrol, diesel and paraffin remain at MK722.60, MK754.60 and MK633.20 per litre respectively which is a relief for motorists.
Through a press statement released on October 7, 2015 signed by Dingiswayo Jere, Mera’s Board Chairperson available to The Maravi Post shows that although the price of diesel qualified for an upwards price increase, it has not been adjusted as Mera resolved to use the price stabilization fund to sustain the pump price.
“The average Free On board (FOB) price of petrol, diesel and paraffin dropped significantly in the month of September 2015, when compared to the ruling average FOB prices obtained in April on which the current fuel prices are based on. The FOB prices of petrol, diesel and paraffin have declined by 19.21%, 18.26% and 18.58% respectively in September 2015 attributed to weak demand due to stagnant of economic growth in many economies.
“Since the last review of the In Bond Landed Cost (IBLC) of petroleum products on May 5, 2015, the Malawi Kwacha has depreciated by 24.55% against the United States Dollar trading at MK559.87/USD from MK449.5/USD noted in May, 2015”, reads in part, Mera’s statement.
The combined effects of the movement of the FOB prices and exchange rate of the Kwacha to US Dollar has resulted in increase of the landed cost of petrol, diesel and paraffin by 3.81%, 5.31% and 4.15% respectively.
“According to the automatic Fuel Pricing Mechanism (FPM), diesel qualified for an upward price adjustment since the landed cost increase beyond the 5% trigger limit. However, Mera board has resolved to cushion the impact of the increase in the landed price cost of diesel beyond 5% thresholds through use of the Price Stabilization
Fund (PSF). As such all operators are required to sell petroleum products at prices not exceeding these maximum pump prices”, concludes the statement.
