LILONGWE-(MaraviPost)-The Consumers Association of Malawi (CAMA) says ongoing nationwide fuel shortages has significantly affected the prices of goods and services across the country.
CAMA’s Executive Director, John Kapito, stated in a press release on Wednesday, November 28, that market inspections indicate that the prices of most goods have risen by an average of 50%.
He noted that transportation costs have surged by 70%; for example, the price of sugar has increased by 33%, while cooking oil has gone up by 57%.
Soap has gone up 70%, with the most severe impact felt in bus fares and the transportation of goods, which have escalated by an average of 80%.
Kapito lamented that the severe fuel shortages have led to skyrocketing transportation costs, urging for regulated fuel price increases to mitigate the scarcities arising from import challenges.
“These challenges have placed pressure on the financial instruments used for fuel imports, resulting in the Malawi Energy Regulatory Authority (MERA) accumulating debts exceeding two trillion kwacha due to lower fuel pump prices.
MERA’s failure to implement the Automatic Pricing Mechanism (APM) has exposed the fuel industry and market to foreign exchange challenges and ongoing losses at fuel pumps,” said Kapito.
CAMA had previously warned the nation about the impending fuel shortages, emphasizing that these shortages are more detrimental than gradual increases in fuel prices for the economy, transporters, and consumers.
He expressed concerns about potential difficulties that citizens would face, such as long queues at filling stations and the broader economic impact that the scarcities would bring, effectively halting business activities.
Unfortunately, he noted that this warning was met with negative reactions from some consumers and a particular member of Parliament.
CAMA criticized this response, describing it as uninformed and dismissive, especially from an individual who appeared to be under the influence of alcohol.
Nonetheless, Kapito appreciated the understanding shown by the Natural Resources and Climate Change Parliamentary Committee regarding the challenges that fuel shortages would pose for Malawians as a result, both CAMA and the Committee feel vindicated in the advice they provided, which has unfortunately turned into a nightmare for consumers and the economy.
He highlighted that MERA has robust mandates and laws that empower it to regulate the fuel market effectively, ensuring that consumers pay fair prices and that fuel importers receive adequate compensation for maintaining a continuous fuel supply.
The Energy Regulatory Law guarantees MERA’s independence and outlines transparent methodologies for determining fuel pump prices.
However, Kapito pointed out that MERA’s independence is under threat as it struggles to assert its authority and provide technical and financial guidance on fuel pricing.
He stated that MERA’s failure to utilize the Automatic Pricing Mechanism, designed to assist in decision-making for price adjustments, has led to the current fuel supply challenges that are paralyzing the entire economy.
“MERA’s mandate allows it to announce gradual price increases or decreases independently, without interference from the executive branch or Parliament, ensuring smooth execution of its responsibilities,” he added.
He urges consumers to consider whether it is preferable to have regulated fuel pump prices that adjust gradually or to face unnecessary shortages, which result in long queues and the need to buy fuel from the black market at double the official prices.
Kapito encourages MERA to conduct civic awareness sessions in collaboration with the Natural Resources and Climate Change Parliamentary Committee to educate select members of Parliament who may lack understanding of the regulated fuel pricing processes.
