Malawi Energy Regulatory Authority (Mera) has reduced the pump price of petrol by K53 with effect from midnight yesterday.

This means petrol is selling at K1946 per litre, a 2.65 percent reduction from K1 999 per litre.

Diesel and paraffin have, however, been maintained at K1 920 per litre and K1 236 per litre, respectively.

Mera chief executive officer Henry Kachaje said at a media briefing at Crossroads Hotel in Blantyre yesterday that diesel and paraffin did not qualify for any price change.

Motorists to pay less for petrol

He said applying the automatic pricing mechanism (APM), “petrol qualified for a downward price adjustment since the change in the landed cost was beyond the plus or minus five percent trigger limit whereas diesel and paraffin did not qualify for the price revision as the changes in landed cost were within the plus or minus five percent trigger limit”. 

According to Kachaje, the combined effect of performance of the kwacha and average free on board (FOB) prices resulted in landed costs changes of -6.27 percent, 3.58 percent and  3.91 percent for petrol, diesel and paraffin, respectively.

Since the last price review in June 2022, the kwacha has remained relatively stable trading at K1 036.24 against the dollar.

Consumers Association of Malawi executive director John Kapito in an interview yesterday said consumers are yearning for better days as the current reduction offers little hope for their well-being.

“All parameters that are used to determine pump prices are pointing to even tougher times for consumers. We can, therefore, celebrate with caution considering that it is not much and the outlook is cloudy,” he said.

On his part, Malawi University of Business and Applied Sciences economist Betchani Tchereni also observed the reduction is insignificant to allow for any notable changes in the economy.

He said: “While we celebrate this marginal decline, the truth of the matter is it is insignificant to slow down inflation which is also triggered by the rise or decline of fuel prices.

“On the other hand, most goods in Malawi travel by diesel cars, as such, a significant reduction on this commodity would trigger positive change.”

Mera adopted the APM in 2012, a means whereby fuel pump prices are adjusted to reflect fuel price movements on the international market and pump price adjustments reflect the changes in value of In Bond Landed Cost of petroleum products and movements of the kwacha against the dollar.

Meanwhile, the average petroleum spot prices per barrel are seen at $100, an increase from an average of $48.5 in 2021.

The significant and projected continued increase is on account of the Russia-Ukraine war, as the sanctions imposed on Russia and its allies have created supply shortages across the globe.

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